Investmentanalysis as of 17.09.2018

Multitalent AG – Prestige, Exclusive and Prime

This bond is designed for international investors and completes the upper end of the current issues of the Vivat Multitalent Group. The target investments have not yet been specified, but the responsible people have developed lucrative real estate projects in the past. The interest yield is in line with the opportunity / risk profile.

The offerer

Multitalent AG, Liechtenstein, was established at the beginning of 2018. The sole shareholder is the chairman Waldemar Hartung, who is also the person with overall responsibility and shareholder of all companies of the Vivat Multitalent Group. The lawyer Gerd Jelenik is the vice-chairman. His CSC AG serves as an office address for Multitalent AG; it is also understood that the physical gold will be stored via CSC AG.

According to the Articles of Association, Waldemar Hartung can change the investment purpose and the investment conditions at his discretion without a supervisory board.

By its own account, the Vivat Multitalent Group has issued subordinated loans since 2012. The issues of the Vivat Group with a total volume of EUR 45 million have proceeded without any problems so far, at least no complaints can be found in the relevant portals. The 2016 management report of Vivat Multitalent AG indicates lucrative real estate projects.

Vivat Verwaltungs GmbH, Kempten is responsible for the Europe-wide sales in the case of this offer. Its managing director Daniel Hartung, son of Waldemar Hartung, can point to several years of experience in sales in the meantime. The Vivat Multitalent Group is currently the only offerer on the market with such a wide-ranging target area. The group is structured very professionally; the integrated external partners are also top-notch, as can be seen from the project quality.

As usual, the offerer quickly responded in exemplary fashion to questions arising in connection with the analysis and supplied all the requisite supporting documents.

Weaknesses – Single shareholder can act as he pleases.

Strengths – Offerer is experienced in public issues and sales. Previous issues are proceeding without any problems.

The investment segments

It is understood that the net capital from the issue will primarily be invested in German real estate projects. A small part (around 5 %) will be held in physical gold. In this respect, gold is forecast as a pure hedge, a store of value, which makes perfect sense. It is understood that the bond capital will be invested directly / indirectly in German real estate projects. The projects of the past are preferably taken as a basis; this concerns classic new-build projects or restructurings. In this respect, Multitalent acts as a partner and normally invests the money as a co-investor with other investors, also institutional investors in part. Access to very lucrative projects which enable reasonable returns is thereby possible.

Bank financing can be provided at project level. This is usual in real estate projects; interim bank financing – in high-grade projects – is also a manageable risk owing to the usual short term of around 24 months until completion. The 2016 management report of Vivat Multitalent AG – this is the parent company where all the capital flows converge – indicates six ongoing projects for the end of 2016. Four of them have been implemented with reputable developers from Leipzig and two more are being handled in-house. There were already 13 ongoing projects at the time of analysis.

Since the loan subscribers have no rights of co-determination whatsoever, they must have complete trust in the expertise of the responsible people at Multitalent during the term. Even if the investment environment for German real estate is currently extremely positive, the art lies in separating the wheat from the chaff. As heart and soul of Multitalent AG, Waldemar Hartung has this ability at his disposal, as can be verified.

Weaknesses – Target investments are not evaluated on a yearly basis for investors.

Strengths – Offerer has extensive in-house expertise in the target real estate segment at its disposal. Target segment enables attractive returns with appropriate access and expertise for selection and implementation.

The concept

The investor invests his or her money in Multitalent AG, Liechtenstein via a fixed-interest partial debenture (also referred to as a “bond“). The latter further invests the capital directly in real estate projects or companies. Since the loan is valued as outside capital, it would be treated on an equal footing with other outside capital in the event of enforcement. Since the issuer raises no other outside capital, the loan subscriber is foremost, along with other investors. The capital seeker is a new company; the business risk is therefore high by definition.

The initial soft costs are high at 18 %; the sales commissions are above average at 13 %. The overheads at administrative level are apparently moderate. However, as mentioned several times, the single shareholder can increase the cost burden at his discretion. The interest for the lender is between 6 % and 10 % p. a., payable quarterly on a pro rata basis. The economic calculation adds up if the bond is invested in short-term real estate projects. Experience has shown that the returns at the beginning of the value chain are so high (normally well over 20 % p. a. with the respective project quality) that the high interest rate and the initial costs can be achieved. However, the fundamental prerequisite for this is access to lucrative projects which can be disposed of for a suitable price on completion. As the responsible person, Waldemar Hartung has had the required access up to now, as can be verified.

Since the bond has been designed for a fixed term of 5 years, 2 project cycles would notionally be possible with appropriate placement of the possible CHF 20 million. Since the in-house sales organisation of the Vivat Multitalent Group is highly professional and has been established Europe-wide and the external sales organisation seeks lucrative concepts, placement in the next 12 months with adequate capitalisation should therefore be possible.

Weaknesses – Single shareholder can act without supervision or control, also to the obvious disadvantage of the investor capital.

Strengths – Experienced offerer. Previous issues are proceeding without any problems. Offer completes the product range. High interest yield which is in line with the opportunity / risk profile. Two project cycles possible during the term of the bond.

The target group

The term of 5 years, the high possible interest yield and the target segment of real estate project development and the subordinated position of the investor clearly appeal to experienced investors who desire an appropriate opportunity / risk ratio.

The offerer's company history is a short one; fixed partners have not yet been defined for the most part. Nevertheless, the previous issues demonstrate that the concept basically adds up; the risk premium therefore appears reasonable on the current basis and even attractive against the backdrop of the market environment.

To sum up

I think the “Prestige“, “Exclusive“ and “Prime“ offers of Multitalent AG, Liechtenstein, are flawless. An experienced responsible organisation is behind the new offerer, and the concept has also successfully completed its baptism of fire. The high initial costs should be manageable without any problems as a result of the possible individual returns at project level. In my opinion, the offers merit a rating of “flawless“ (2+).