HIH Invest increases its assets under management beyond 22 billion Euros

28 February 2024

HIH Invest Real Estate (“HIH Invest”) has continued its growth trajectory even in the currently challenging market environment. The investment manager’s assets under management (AuM) increased by c. 3.4 billion euros to c. 22.3 billion euros, and the number of its institutional accounts from 261 to 278. The real estate fund business grew by more than 500 million euros to c. 16 billion euros. During the past financial year, the asset manager’s mandates achieved an average fund performance of more than 5 percent p. a., buoyed by a very high occupancy rate.

“We were able to pick up more than 500 million euros worth of opportunities with a significantly higher yield level on behalf of our investors in 2023. The high occupancy rates of our portfolios were achieved through successful lettings in all segments, but most notably through large-scale office lettings. The strong average performance of the funds was accomplished via our active asset management, but even for us, impairments dampened the performance of those funds that were more recently launched,” elaborated Felix Meyen, Managing Director of HIH Invest. “Highly profitable counter-cyclical investments will keep defining the activities on behalf of our investors in 2024 as well. In addition to investments in the asset classes of residential and logistics real estate, market players going against the trend are in for a great time with selected opportunities in the areas of office and healthcare real estate. Active manager have the chance to earn yields between 5 percent and 7 percent in the core/core-plus segment and double-digit yields for value-add strategies, a good case in point being the LogPark logistics property in Leipzig that we acquired this past December,” Felix Meyen added with a view to the prospects for the months ahead.

With a volume increase by more than 3 billion euros, the umbrella/master fund and consolidation business of HIH Invest contributed substantially to the growth. In addition to real estate investments, the range of deliverables in the consolidation segment was expanded to include the full spectrum of alternative investments, infrastructure, renewable energies and private equity. “Demand among institutional investors for the consolidation of all alternative investments into separate account mandates has increased significantly during this market cycle, which has been defined by massive changes. In the course of 2023, we accepted mandates in a combined value of c. 4.5 billion euros, so that the volume of our multi-manager business grew to more than 11 billion euros. The trend continued into the starting months of the current year, so that we expect to see this segment to grow to more than 15 billion euros in 2024,” said Alexander Eggert, Managing Director of HIH Invest.

Carsten Demmler, another Managing Director of HIH Invest, commented: “We are an investment manager whom clients trust in any market situation, meaning not just during boom cycles but also in economically challenging times. This gives us the chance to make the most of our experience, to make the entire value chain and service chain available to our investors, and simultaneously to exploit the current market cycle by seizing investment opportunities and actively streamlining our real estate inventories. Our clients’ faith in our competencies is most convincingly reflected in the ambitious mandates assigned to us. As a result, we acquired new clients even last year, and now manage 278 key accounts.”

The business with renewable energies, backed by c. 100 million euros, was expanded through investments in wind-power and photovoltaic systems. “Our activities in the infrastructure sector in 2023 continued to concentrate on our ‘HIH Green Energy Invest’ sustainability fund that pursues a strategy in line with Art. 9, EU Sustainable Finance Disclosure Regulation. It gives our institutional investors the chance to expand their commitments in the area of renewable energies and thereby to help bring about the energy transition. Aside from the sustainability aspects, it pays about 7 percent return on investment and is thus a rather lucrative investment,” as Carsten Demmler went on to elaborate.

HIH Invest intends to maintain its growth trajectory in 2024, too: “We are planning to increase our business volume to 25 billion euros in 2024. On the one hand, our real estate business will gather momentum by seizing profitable opportunities, which are most likely to emerge in foreign markets whose cycle has progressed faster than the one in Germany. On the other hand, the market situation has encouraged investors to retain us for challenging mandates, which we are glad to take on. The strong demand for our consolidation solutions and the field of renewable energies will further contribute to the growth dynamic,” said Alexander Eggert, Managing Director of HIH Invest, as he commented on expectations for the ongoing year.

The growth trajectory of the HIH Group is reflected in its human resource trend. In the course of the past year, the Group’s employment total went up from 838 to 872 staff by 31 December 2023.