MICHAEL SCHNEIDER, THE TEN-YEAR ANNIVERSARY OF A COMPANY INEVITABLY MAKES YOU LOOK BACK A DECADE. WHERE AND WHEN WAS THE IDEA BORN TO SET UP INTREAL?
The model of the third-party AIFM or master AIFM has been entrenched in the securities business for decades. In the real estate sector, by contrast, legal constraints had previously made it impossible to separate fund administration from portfolio management. This changed when Germany amended its investment legislation in late 2007. Warburg – Henderson KAG, as it was called at the time, was the first company to take advantage of the new option. It chose this path primarily in order to outsource its back office and thus to use fund administration services provided by third parties. Doing so made it easier to distribute rising costs. One of the founding fathers of INTREAL is Erik Marienfeldt, Managing Director of HIH Real Estate, who has been a member of the Supervisory Board of Warburg – Henderson KAG (now Warburg-HIH Invest) and INTREAL since their founding.
DID YOU EXPECT INTREAL’S BUSINESS TO DEVELOP SOQUICKLY AND SO POSITIVELY?
The initiators were always convinced of their idea of optimising the fee structure by splitting it between several users of an administration platform. But the business model has more to offer than just the costsharing angle: What helped INTREAL to successfully pioneer the business model of third-party AIFMs for the real estate sector and to become an established brand was the consistent further development of the advantages for asset managers and investors, such as flexibility, security and know-how, and to use them for new business angles.
Nevertheless, we did not foresee growth on this scale. If you look at old business plans, which we probably considered ambitious at the time, you will find that their 2019 forecast projects a company at most half the size of INTREAL today. The fact that we crossed the mark of 24 billion euros in Assets under Administration is definitely a major achievement, but it is also to a certain extent attributable to the sustained boom in the demand for real estate investments.
DR. DETLEF MERTENS, LET US LOOK TEN YEARS INTO THE FUTURE: WHERE IS INTREAL LIKELY TO BE IN 2029?
I assume that INTREAL will still – just like now – be one of the leading third-party AIFMs (Service KVGs) in Germany. Going forward, we intend to reposition ourselves as a leader in quality because growth “at any cost” is not a sustainable corporate objective. Moreover, I am sure that our activities on behalf of other AIFMs will substantially expand in the future. Here is why: Both the regulation and complexity, on the one hand, and the responsibilities in connection with investors and real estate, on the other hand, will intensify. Coping with these requirements will increasingly necessitate a consistent division of labour and the use of specialists.
But the main challenge for INTREAL during its second decade will perhaps be the internationalization of our business. For the time being, we are still very much focused on Germany as a fund location. We plan to change this. My hope is that the growth of the coming years will be evenly divided between German vehicles and foreign vehicles. The main angle we will pursue toward this end is setting up and expanding our business in Luxembourg, Europe’s leading investment fund hub. A growing number of foreign managers and investors are asking for expanded services and comprehensive investor reporting of the kind we have already established successfully in Germany.
ANDREAS ERTLE, WHAT HAS MADE INTREAL SO SUCCESSFUL?
To a certain degree, the question could be answered by saying that it was a matter of having of the right idea at the right time. But that is not the whole story, of course. INTREAL’s greatest asset is our staff of qualified professionals. They are indispensable for turning ideas into customized solutions and for upgrading them continuously. The very nature of real estate, as an asset class, which is the basis of our business model, limits the degree to which automation and IT can be used, as important as they may be. The issues and challenges involved have, and will continue to have, a one-off character, making the use of specialists indispensable. Thus we focus on having a corporate culture committed to our employees. This includes fully integrated inhouse communication and a smooth information flow. Social cohesion is very important to us. Our hope and ambition is to make our employees feel at home and to maintain a connection that goes beyond the professional and makes INTREAL a cherished part of their lives.
A QUESTION TO ALL MANAGING DIRECTORS: HOW DO YOU TURN THIS AMBITION INTO REALITY?
Of course, that is a permanent challenge that – being without an alternative – we have to rise to. We have a high level of staff retention. This is illustrated by the fact that almost all employees we started out with are still on the payroll. On the occasion of this anniversary, we would like to thank all of our employees. Without them and their dedication, the INTREAL’s success – which is nothing short of extraordinary – would be inconceivable.
We would also like to thank our many fund partners and other business partners, both those who have accompanied us for many years and those who recently joined us. We have learned a lot from our clients and partners, and the successful further development of INTREAL has been a joint effort. That they put their faith in us has been instrumental for our progress and highlights the true reason for INTREAL’s success: consistently delivering customer- and performance-oriented products. We will strive to continue to meet these expectations.