GI Partners, the trans-Atlantic private equity house, has backed the launch of Elystan Capital Advisers ("Elystan"), a Munich-based investment firm targeting mortgage backed assets and the mortgage banking sector in Germany, Austria and Switzerland. GI Partners will provide investment capital from its recently closed third fund, GI Partners Fund III L.P., which closed at $1.9 billion in October 2009.
Following recent developments in the financial markets, the Elystan founders, Keith Fischer, Dr. Robert Grassinger and Ulrich Kastner believe that there is significant pressure on the banking industry to strengthen balance sheets and minimize exposure to certain non-core and non-performing assets. It is expected that this pressure will lead to a number of investment opportunities across the mortgage and real estate sector as financial firms look to reduce their exposure to these non-performing assets through divestment. The firm's strategy is to acquire these non-performing loan books as well as mortgage-backed securities and real estate portfolios which it plans to consolidate and actively manage to improve performance.
In addition, Elystan has been working with GI Partners since June 2009 to pursue the acquisition of a bank to be used as a platform to expand and grow a mortgage lending business which can fill the gap in credit available to Mittelstand companies.
Elystan is led by its three founders, all of whom are highly experienced in the banking and real estate sectors. Keith Fischer had previous roles at Citibank, Orion Capital Managers and Lehman Brothers. Following an early career in academia, Dr. Robert Grassinger has held a number of senior roles within Württemberger Hypo and Hypo Real Estate. Ulrich Kastner has worked at numerous financial institutions in UK and Germany including Deutsche Bank, Dresdner Kleinwort Wasserstein and Lehman Brothers. All the founding directors have strong investment experience in German real estate debt and assets and together they have accumulated over 50 years experience in the German market.
GI Partners has significant experience in the specialist finance area having backed Ladder Capital the US specialty finance company providing comprehensive financing solutions to the commercial real estate ("CRE") industry in October 2008. Ladder Capital originates and invests in a diverse portfolio of real estate-related products, including first mortgage loans, CMBS, mezzanine loans and other special situation investments. Since formation, Ladder Capital has deployed in excess of $1 billion in capital.
Mark Tagliaferri, Managing Director of GI Partners, commented: "We are delighted to be working with the three principals and backing the Elystan platform. Their strong industry experience combined with their strategic vision of opportunities in the German market make them an ideal partner for GI Partners. We look forward to building Elystan into a significant business in the German mortgage banking sector."