Investmentanalysis as of 10.09.2019

Multitalent AG – Vivat Prestige, Vivat Exclusive and Vivat Prime

The Vivat Group continues its successful investment series with this issue. The first completed and ongoing projects prove the high work quality of the offerer. The investor must accept a pronounced key personnel risk for an attractive interest rate.

The offerer

Multitalent AG, Liechtenstein, was founded at the beginning of 2018 as part of the Vivat Group, which was established in 2012. 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 Group has issued subordinated loans since 2012. The issues of the Vivat Group with a total volume of approximately € 85 million in the meantime have proceeded without any problems so far, at least no complaints can be found in the relevant portals. According to the available project list, there are – unaudited – returns from at least 6 projects of the 15 individual real estate investments to date (3 individual investments have been concluded). The current excess reflux (as of the end of 2018) was approximately € 1.5 million. There is probably still a significant potential for additional earnings in the case of the 3 projects which have not yet been concluded, meaning that the liquidity position of the Vivat Group should develop very positively in the years to come. The apparent initial project-typical overindebtedness according to the accounts would therefore be obsolete. According to the offerer, there is also 45 kg of physical gold, which shows a book profit for the present at least.

Vivat Verwaltungs GmbH, Kempten, is responsible for sales across Europe. Daniel Hartung, son of Waldemar Hartung, is the managing director here. The Vivat Group is currently the only offerer on the market with an offer distributed in Germany, Switzerland, Austria, France, Belgium, Italy, Latvia, Estonia, Lithuania, Poland, Hungary and Liechtenstein. The group is structured professionally; the integrated external partners are also top-notch, as can be seen from the project quality. I have personally known Waldemar Hartung since the end of 2016. To date, he has proven to be reliable and conscientious in every specific issue within the scope of the analysis and beyond. Third parties, some of whom have known Hartung for decades, also attest exclusively to an unblemished reputation. Since Hartung is the person in overall charge of this concept, exclusively positive experience of this kind is essential, even if it cannot be a guarantee for the future.

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 – Key personnel risk owing to sole decision-maker.

Strengths – The offerer is extremely sales-driven, as the success of the previous issue shows. The initial returns from individual investments testify to the work quality of the offerer.

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 used purely as a hedge; an increase in value is not forecast, which makes perfect sense. The partial investment in physical gold means that Multitalent AG finds itself in the best of company together with a large number of prominent international asset managers. In addition, the current sense of political and economic crisis actually makes gold increasingly attractive as an investment which extends beyond the mere preservation of value. By its own account, Multitalent AG currently holds 45 kg of physical gold.

The real estate projects consist of conventional new-build projects and refurbishment measures. The greatest profit potential is provided in the first step of the value chain – if the designer knows his business. Multitalent invests in two areas: Some projects are implemented completely self-responsibly. The project volume here is currently between € 800,000 and € 1.4 million. In other projects, Multitalent invests money as a co-investor alongside other investors, some of which are institutional. For example, an individual ticket of € 2 million was invested in a project in Potsdam with a total volume of € 932.5 million. In my experience, such a co-investor strategy is unusual in this constellation and proves the excellent networks of Multitalent AG.

Bank financing can be provided at project level. This is normal in real estate projects; interim bank financing – in high-grade projects – is also a manageable risk owing to the usual short term of up to 36 months until completion. The current list of projects as of the end of 2018 includes 12 ongoing projects; 3 individual projects have already been completed. According to the list, the total invested capital amounts to around € 24.3 million, the total returns amount to € 9.18 million and the earnings potential from the ongoing (partial) investments is significantly higher than the invested capital.

The resulting portfolio is a positive aspect of Multitalent AG‘s investment strategy. The overall risk is improved thanks to diversification via investments (shares) up to currently € 4 million. A possible failure cannot infect the overall portfolio as long as the individual investments are made via legally independent project companies.

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 AG 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 the sole manager 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’s money is invested in the Multitalent AG, Liechtenstein via a fixed-interest partial debenture (also referred to as a „bond“). The latter invests the capital directly in real estate projects or companies (and a small part in physical gold as a hedge). 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. The issuer itself does not raise any further outside capital, so that the loan subscriber ranks first, alongside other investors. The capital seeker was recently founded in 2018, thus the corporate risk is high. Since the Vivat Group has been active in the market since 2012, the corporate risk is equalised to a significant extent.

The initial soft costs are high at 18 %; the sales commissions are above average at 13 %. The overheads at administrative level are moderate. However, as mentioned several times, the single shareholder can increase the cost burden at his discretion. The interest on the bond is between 6 % and 10 % p. a. (payable quarterly on a pro rata basis). A partial withdrawal (Vivat Prestige up to 30 %, Vivat Exclusive and Vivat Prime up to 20 %) is possible during the term from the 2nd full calendar year onward. This creates a degree of flexibility which does not seem to be necessary in view of the reasonable medium term of the bond.

It is highly probable that the profitability calculation will be successful if the capital 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 reimbursed. Access to relevant projects is exitent so far, as can be seen from the available project documentation. 2 project cycles are mathematically possible with the 5-year fixed term of the bond. This issue has a volume of € / CHF 40 million from the outset, as the highly professional in-house sales team of the Vivat Multitalent Group was able to quickly place the previous issue last year. I therefore consider the placement risk, and therefore the capitalisation risk, to be comparatively low.

Weaknesses – Key personnel risk owing to sole decision-maker.

Strengths – Experienced offerer with a very strong sales force. Previous issues are proceeding without any problems. High interest yield which is in line with the opportunity / risk profile. Two project cycles possible during the term of the bond. Partial withdrawal possible during the term. Diversification over a large number of individual projects reduces the overall investment risk.

The target group

The overall investment risk of the concept has been significantly offset thanks to risk diversification via numerous individual investments with varying terms in different regions of Germany. The offerer is increasingly able to demonstrate sufficient expertise in the selection and management of adequate target investments. The concept with a high minimum investment with above-average interest rates and a pronounced key personnel risk makes the offers particularly attractive for experienced investors.

To sum up

I think the “Vivat Prestige“, „Vivat Exclusive“ and „Vivat Prime“ offers of Multitalent AG, Liechtenstein, are impeccable. Based on current information, the responsible person is reliable and trustworthy. The returns from the initial individual investments testify to the quality of the concept. In my opinion, the offers merit a rating of „impeccable“ (2+).