trumps and club deals

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Attractive real estate deals reserved for a select few: that's the principle. But the results are not always the rendezvous.

Allow individuals to buy a real estate asset that they could not have afforded alone like a hotel, an Ehpad, a campsite or a building, such is the same principle of the clubs deals. These structures consist in bringing together a few private and privileged investors (generally from 20 to 30) to jointly finance an unlisted transaction. But beware, warns Xavier Anthonioz, chairman of the management board of the management company 123 IM, "If the basic principle remains the same, namely to carry out a financial tour de table, the term" club deal "covers different realities depending on its underlying investment". Thus, he explains, while some of these groups propose to buy only walls (residential, offices …) in a perspective of rental profitability, others widen this investment to the exploitation of the good via purchase of his business.

However, in both cases, it is usually the intermediary behind the club deal (bank, management company, family office …) "Who selects the operation to finance by checking in particular the quality of the project but also the strength of the asset"says Patrick Ganansia, founder of Herez, a wealth management consulting firm.

The choice of real estate asset

Once this work is done and the investors are convinced, they then become shareholders of a company (most often of the SAS type, simplified joint stock company) created especially for the occasion. Said company becoming itself, according to the nature of the club deal, the owner directly of the property or shareholder of the operator who owns it. And this is precisely one of the main interests of this type of investment, insists Xavier Anthonioz. "Unlike an investment fund, individuals can choose the asset in which they invest. They are masters of their decision and are involved in the life of the company as live shareholders. "

Exploitation and market risks

Except that … by nature elitist given the overall amount of funded projects (2 to 15 million on average) and the limited number of participants, the clubs involve involve a minimum investment of about 100,000 euros or more . And this, for variable returns and in any case guaranteed. If, depending on the level of risk, the performance announced and generally realized in the form of a gain varies between 7 and 12%, the reality may be disappointing.

"Be it operational or market risks, there are potential dangers in the context of unlisted companies. This is the counterpart of the expected high yield ", recalls Patrick Ganansia. As witnessed by the turnaround a year ago, the Maranatha hotel group had plunged its 6,000 investors into turmoil.

And the signing of a shareholders' pact to organize the conditions of entry and exit to the capital of the company created by the club deal does not eliminate the risks associated with this type of investment. Example, explains Xavier Anthonioz, "At 123 IM, we expect our operating partner to be able to redeem shareholder units on a predefined price formula between the third and fifth year after fundraising. If he does not exercise this option, the asset may then be sold to another player. But then at the market price ».

Another big downside of these investments: their illiquidity. The absence of an organized market makes it almost impossible to sell the shares apart from the planned exit cases.

To remember

Deal Clubs

Investment: from 100,000 euros
Risk level: high

Anne-Lise Defrance