Property: German firm Bf Capital enters the Italia market with private debt funds
The company is also preparing to open up the “BF European Flexible Credit” – a pan-European corporate credit fund of funds – to Italian institutional investors. The targets are €250 million under management, more than 10 underlying funds, around 400 loans and a net internal rate of return (IRR) of 11–13 per cent. The aim is to raise a third of the capital from Italia.
BF.capital – a German investment manager (with Italian roots) specialising in the private asset class and real estate debt for institutional investors – is aiming to expand abroad and, yesterday in Milan, introduced itself to the Italian market by launching a new fund. It is called BF European Flexible Credit and is a pan-European corporate credit fund of funds, offering diversified access to specialised European credit funds, with a focus on flexible credit strategies. The targets are €250 million under management, over 10 underlying funds, around 400 loans and a net internal rate of return (IRR) of 11–13 per cent. BF.capital aims to raise a third of its capital from Italia. The product is positioned in a segment of the private debt market characterised by less competition, greater selectivity and a defensive risk profile.
Pending completion of the process to commence operations in our country, the fund is expected to be opened to Italian institutional investors between the third and fourth quarters of the year via the placement agent (pension funds, insurance companies, banking foundations – all of which are structurally under-exposed to private debt and generally have limited access to European fund managers). With a fundraising period of 12–18 months, the Fund will have a duration of 10 years from the end of the investment phase, which lasts 3 years. A half-yearly dividend is expected. On the Italian market, however, BF.capital invests via funds of funds.
“We don’t yet have an office in Milan,” said Francesco Fedele, founder and CEO of Bf.direkt AG, “but we are recruiting staff and intend to open an office. So far, we only have the BaFin licence; we still need to complete passporting for the funds. “We’ve had very positive feedback from pension funds. The Italian market seems dynamic to us and we have several partnership enquiries in the pipeline.”
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“For 18 years,” emphasised Eugenio Sangermano, CEO of BF.capital, “Germany has consistently been the second-largest property investment market in Europe. Although large and liquid, it is virtually absent from Italian property and real estate debt portfolios. “Until the start of the new interest rate cycle,” explained Sangermano, “property investments in Germany were unattractive to Italian investors from a risk-return perspective: yields remained modest despite high entry prices. With the repricing that has been underway since 2022, the picture has been turned on its head: today the market offers very interesting opportunities, particularly on the debt side.”
Founded in 1999 and led by its chief executive and majority shareholder, Francesco Fedele, the Group is one of Germany’s leading independent platforms for the structuring, organisation and management of debt capital for institutional clients. To date, it has managed a total volume of loans exceeding 20 billion and, on average, arranges loans worth over 1 billion each year.
