Optimum exceeds capital raising target with €130m closing

Optimum Asset Management, the Berlin and London-based real estate fund manager expects to generate a return of 15% IRR from investments, mainly in Berlin’s residential market.

Berlin and London-based real estate fund manager Optimum Asset Management has raised €130 million in equity for its second Germany-focused investment fund, according to an announcement by the firm.

Optimum said it had exceeded its fundraising initial target of €100 million for the fund which will be used to invest in residential real estate, predominantly in Berlin. Commercial assets and developments are also expected to figure in the fund.

The Optimum Evolution Fund Sicav – Property II fund is expected to have a total firepower of €250 million, including gearing, and will be focus on “unconventional or niche markets in which it identifies exceptional risk/return dynamics and where it believes substantial return potential can be found”, the firm said in the announcement.

The fund is targeting an IRR of 15 percent over a 5 to 10 year horizon targeting investments reflecting a gross rental yield of 7.5 percent. While the firm is still open to investors, it has an equity ceiling of €180 million.

In its first fund, launched in 2009, Optimum managed a return to investors of 14 percent less than a year after fully investing its capital, the firm said.

Alberto Matta, chief executive officer at Optimum described the fund’s investment rationale as protective of its investors and of generating returns. He said: “The rationale for Berlin real estate is simple especially when you consider the very real prospects of double-digit inflation, the collapse of the banking system and EU governments defaulting on their debt.”

“Real estate is the obvious choice for the risk adverse investor. Germany and Berlin in particular offer, after leverage, returns in the region of 10 percent whilst providing some protection against inflation. this compares very favourably with other industrialised countries where prices are at an all time high in many cities and yields are averaging 3.8 percent. Yield convergence is the bonus, but it could potentially turn out to be the jackpot over a medium to long term,” he added.

Optimum, which alongside its ‘dedicated property manager’ EB Immobilienmanagement, has 45 staff in Berlin and a representative office in London. Alongside the two real estate funds, the firm also manages a private equity secondaries fund.

Led by Matta, its team have held various positions at European banks including BNP Paribas, Société Général and Barclays Capital among other organisations.