The real estate financing fund Verius, valued at 1.2 billion euros, is in the process of being dissolved. Investors should expect to be faced with significant financial losses and are advised to consult an attorney specializing in capital markets law.
According to a report by German business newspaper Handelsblatt from October 17, 2023, the real estate fund Verius is going into liquidation. The fund’s managers have reportedly already informed the investors about this development. The latter should now expect to be confronted with substantial financial losses. Their best bet to protect their invested capital is to reach out to a practising capital markets lawyer for advice and assistance. The team at MTR Legal Rechtsanwälte includes experts in capital markets law.
Verius’ investments were directed towards real estate projects, with the lion’s share of the money raised by the fund coming from institutional investors. These investors have invested around 1.2 billion euros into the fund, a large proportion of which is now at risk. A lawyer with experience in the field of capital markets law can explain what legal options are available to them and review the possibility of filing claims for damages.
The reality that Verius was experiencing serious difficulties became clear by no later than November of 2022 when the investment management company Hauck & Aufhäuser Fund Services froze the fund on account of liquidity problems, and the investors have not been able to access their money since then. One of the reasons behind these economic difficulties is the crisis affecting the real estate market stemming from high interest rates and elevated construction costs. Another likely cause is the fact that the investment company had been investing in risky subordinated debentures issued by project developers.
Last year, Hauck & Aufhäuser asked experts to take a closer look at the fund’s portfolio. The outcome of their investigations was alarming. Handelsblatt reported on their findings in June of this year, according to which 70 percent of the securities that the fund had invested in were at risk of defaulting. An attorney who is well-versed in capital markets law can assess whether claims can be lodged against the fund’s managers given this backdrop. The experts anticipated losses of up to 500 million euros.
This goes to show how serious the situation is for the investors, some of whom invested in the fund indirectly through credit enhancement. The prospect of imminent losses means that these indirect investors should also consider seeking legal advice.
MTR Legal Rechtsanwälte advises on capital markets law.
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