Our structured products involve the creation and then distribution of either commercial real estate (CRE) backed bonds or fixed interest products designed to respectively provide a stable coupon or interest payment for investors who prefer indirect exposure to CRE or which have regulatory balance sheet structuring requirements necessitating the use of such instruments.
Our structured products are created and then managed for take up by primarily European private banks and mid-tier insurance companies, while some securities are originated and then independently placed by our firm via our own panel of preferred distribution partners which have expertise with corporate and or retail subscriber audiences or which have proven reach in a particular geography.
Products are structured only after careful selection of the underlying CRE collateral asset backing which is generally long-lease, to ensure appropriate matching of lease maturities and renewal probabilities with the duration of the product. Careful attention is also paid to the credit covenants and financial standing of the actual tenants in the underlying property to mitigate default risk and to ensure sustainability of coupon or interest payments.
Prior to issue, each product is subjected to rigorous scenario stress-testing via our proprietary models, and then externally rated by market leading external credit rating agencies such as SCOPE, Morningstar, and S&P. All products are registered with an International Securities Identification Number (ISIN) which uniquely identifies each security in accordance with the requirements of new European regulations such as Solvency II.
Typically depending on the structure and level of the underlying real estate debt required at the time of acquisition, such structured securities are second-ranking behind the senior debt facility lender, but are all non-recourse to bond or fixed interest note holders.
In accordance with relevant European regulations, external administrators, depositories and payment agents are utilized throughout the term of the issue with appropriate offering documentation published after approval by the relevant competent authorities such as the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg.
A key feature of our structured products is alignment between the issuer and Caerus as the underlying asset manager to the real estate via a partial subscription by the issuing entity on pari-passu terms as other security holders to ensure an appropriate level and means of risk alignment.
For investors who do not wish to have indirect exposure but prefer direct investment into CRE, we offer thematic and risk adjusted stand-alone investment strategies, via our Separate Accounts or Alternative Investment Funds.