For investors in closed-end fund structures, the premature or regular sale of their units continues to represent a significant hurdle. Early termination is generally contractually excluded, and redemption via the issuing company rarely takes place in practice. Against this background, Key Investors GmbH from Düsseldorf has established a structured bidding process under the name Fonds-Exit, intended to provide sellers of holdings in real estate, shipping, energy, aircraft, and private equity funds with transparent market access.
The initial situation in the German market for closed-end investments is complex: although more than 4,500 launched funds exist nationwide, actual transactions on the secondary market take place on a very limited scale. In addition, the framework conditions of many vehicles have altered considerably over the years. Numerous initiators have withdrawn, run times have been extended, and partnerships restructured, meaning that original points of contact are often no longer accessible for subscribers.
Price discrepancies on the secondary market and institutional buyer base
Just how demanding valuation and disposal currently are is illustrated by the prevailing trading level on Fondsbörse Deutschland. There, corresponding holdings currently change hands on average at merely 59 per cent of their original nominal value. This makes it all the more crucial for sellers to obtain several independent offers, as the calculation bases of prospective purchasers differ considerably.
In this context, Michael Kempkes, Managing Director of Key Investors GmbH, points to his more than 30 years of capital market experience and his network of fund companies and professional market participants. The objective is to provide fund subscribers with direct access to specialist buyers, family offices, and institutional investors that would otherwise be scarcely reachable for private investors acting on their own.
Procedure of the structured bidding process
The sales process via the platform follows a standardised sequence in which sellers initially submit the fund name, the nominal amount, and the trustee's most recent report. On this basis, a realistic price range is determined before the actual bidding process is initiated:
- —Determination of a well-founded initial price indication based on the submitted fund documents
- —Execution of a structured bidding process with a standard duration of ten working days
- —Transparent comparison of all incoming purchase offers from interested institutional parties
- —Support throughout the entire transaction by Fonds-Exit through to the final corporate transfer of ownership
The ultimate decision remains entirely with the unitholder: they decide independently whether and which purchase offer to accept, or whether the holding is retained in their own portfolio. Concurrently, the system is open to registered investors, who receive access to processed investment documentation for structured due diligence.
