Corestate Capital – Part 2: Why things had to happen

Before looking at what the future might hold for CCAP, I wanted to post a summary of how it started and why ‘certain things’ happened – actually had to happen, in my view.

You see, some of the stuff I said in part 1 need to be explained. Because I actually do see them differently.

4 CEOs in 4 years since the IPO. A disaster? No, I think it actually had to happen.

It all started with Ralph Winter. You know they say there are 3 types of people: Those who make things happen, those who watch things happen and those who wonder what happened.

Ralph Winter makes things happen.

The former MD of Cerberus Germany started Corestate in 2006 with half his former team (including VP Thomas Landschreiber) as a real estate private equity boutique. The limiting factor to grow in real estate is money (and relationships/network) so rather logical to take Corestate public in order to improve your access to capital (but no small feat to achieve it).

The listing in late 2016 gave Corestate a public currency and it immediately went on a crazy acquisition spree (Hannover Leasing for €32m, Atos for €26m and HFS for €620m) taking the company’s AuM from €2.8bn in 2016 to €22bn in 2017.

The thing however is as the founder of a private company, you can do everything you want (within the limitations of the law / tax code), as a public company, you are expected to adhere to good corporate governance standards. Particularly if other people entrust you with their money or assets.

Since this is a public blog I will not go into details, but point to the long list of related party transactions in the annual reports 2016-2019 and you should also read the bond prospectus.

The transformation from a founder led organization to a public company with improved governance standards is not easy, does not go without friction and unfortunately requires a churn in (i) major shareholders connected to the founders (ii) management connected to the founders and (iii) supervisory board connected to the founders.

That’s why the frequent changes happened and had to happen. The good news is this transformation appears to be complete now and Corestate will rebrand itself to close this chapter for good.  

But whether the right persons are leading the ship now, remains to be seen.

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