A service of

Dr Ruprecht Hellauer, Founder of Albulus, on finding the right opportunities in the German real estate market

In a recent fireside chat, Dr. Ruprecht Hellauer, the managing partner of Albulus, shared his insights on the German real estate market, focusing on the opportunities within the distressed debt sector. The discussion, hosted by Giovanni Amodeo, covered a range of topics, including Hellauer’s background, the evolution of the non-performing loan (NPL) market in Germany, and the strategies employed by Albulus to navigate this complex landscape.

Background and Foundation of Albulus: Hellauer, with a rich history in real estate development since the mid-1990s, transitioned to focusing on non-performing loans in the early 2000s. This shift was motivated by the cyclical nature of the real estate market and the potential for more stable returns in the NPL sector. His experience with Soros Real Estate Partners and the establishment of a Fitch-rated special servicer laid the groundwork for founding Albulus.

Strategies and Fund Performance: Albulus’s strategy revolves around purchasing sub-performing loans close to par and capitalizing on default interest rates. This approach has proven successful, with their first commingled fund attracting €130 million from German institutional investors and a family office, delivering an attractive IRR of 6%+. Hellauer emphasized the importance of conservative loan acquisition, focusing on senior secured loans with low LTV ratios to mitigate risk.

Market Insights and Future Outlook: Hellauer provided valuable insights into the German NPL market, highlighting the regulatory environment, the importance of local relationships, and the differences between the German and Anglo-Saxon markets. Looking ahead, Albulus plans to launch a new fund targeting €250 million, aiming for an 8% IRR. This fund will continue to focus on the niche of sub-performing loans, leveraging the team’s deep understanding of the market and existing relationships.

Challenges and Opportunities: The discussion also touched on the challenges of talent acquisition in a market where the last major wave of NPLs occurred over a decade ago. However, Hellauer is optimistic about assembling a skilled team to manage the anticipated increase in demand for special servicing.

Conclusion: Ruprecht Hellauer’s fireside chat offered a comprehensive overview of the opportunities within the German real estate market, particularly in the distressed debt sector. His insights into the strategies, challenges, and future plans of Albulus provide valuable lessons for investors and professionals interested in this space. As the market evolves, Albulus is well-positioned to capitalize on the emerging opportunities, with a focus on conservative growth and delivering solid returns to its investors

Key timestamps:

00:09: Introduction to ION Influencers’ Fireside Chats
00:39: Rupert Hellauer’s Background and Albulus
01:58: Setting Up an Investment Platform in Germany
04:49: Property Developer Experience and Strategy
06:09: Size and Strategy of the First Fund
07:29: Opportunities and Investor Expectations
09:02: Learning from Acquired Loans
10:15: Key Elements of the Strategy
10:55: Extending the Runway for Borrowers
11:45: Borrower Profile and Repeat Business
12:44: Building Relationships with German Banks
13:51: Regulatory Environment and Adaptation
15:38: Evolution of Niche and Future Plans
18:03: Timeline for Next Fund and Placement Strategy
19:21: Differences Between German and Anglo Saxon Markets
22:41: Success in the German Market
25:18: Challenges in Hiring Talent
26:14: Demand for Servicing Expertise
27:20: Conclusion