The selection and valuation process of assets
The selection and evaluation process of all assets is carried out internally in several stages, involving our The RECan Global teams in both Canada and Germany/Luxembourg.
In addition, there is an independent, external due diligence and final assessment, which is mandatory before any purchase decision is made, by the General Partner (GP) and the fund manager (AIFM), Pancura.
- Screening process, Selection of suitable investments
RECan Global GmbH as the investment advisor in cooperation with the whole RECan Global Group and its partners, source, filter, analyze and evaluate real estate assets that meet the investment criteria. Initial review / recommendation to the Internal Investment Committee and Pancura, the AIFM, is informed.
- Internal due diligence, Preliminary Investment Proposal, PSA
Assets that are accepted by the Internal Investment Committee are then internally subjected to a substantial pre-due diligence review (internal due diligence by RECan Global GmbH). RECan Global then prepares the Preliminary Investment Proposal “PIP" for review by the GP and the AIFM. Based upon a successful review by the GP and AIFM a conditional purchase and sale agreement (PSA) is issued (conditional on the results of the external due diligence).
- External due diligence, Final Investment Proposal (FIP)
Once the conditional PSA is executed the AIFM approved independent external due diligence partnes are engaged, who prepares an external due diligence report for review by the GP and the AIFM. Parts of the external due diligence can be outsourced to local, external experts (finance, law/tax, building condition, environment, etc). If a positive due diligence report is received, the FIP will be issued, otherwise the PSA will be terminated.
- Investment structuring, Optimum investment structure
Specialists from RECan Global GP Luxembourg S.à r.L in cooperation with the whole RECan Group lead the transaction management. The external due diligence partner and local tax and legal experts advise and implement the optimal investment structure, and if required, negotiate any amendments to the deal, as approved by the AIFM and GP.
- Final acquisition decision - the GP acquires the asset based on the approval of the AIFM
The AIFM and GP review the final FIP. If approved, RECan Global GP Luxembourg S.à r.L. completes the transaction (including the debt financing) and acquires, through the appropriate subsidiary, the asset as General Partner of the Fund. The transfer of information to PG Asset Management Inc, as asset manager is completed.
- Post-closing process, Asset Management
With its specialists, PG Asset Management Inc. leads the asset management with its own team in Canada, as service partner of the GP. PG Asset Management assigns responsibility for property management and leasing services to local service providers. In addition, the GP assigns a recognized independent external partner (Deloitte in Luxembourg on fund level / Baker Tilly in Canada on asset level) to provide auditing/reporting/tax services. Oversight of the asset management function is provided by the GP in cooperation with the Investment Advisor (RECan Global GmbH) and the AIFM (Pancura).
- Active portfolio optimization, Consulting
RECan Global GP Luxembourg S.à r.L reviews, in cooperation with the Investment Advisor (RECan Global GmbH), the portfolio on a continuous basis to achieve the optimal return for each asset. With the involvement of the AIFM assets can be sold prior to the end of the fund, with proceeds invested in new assets, if it is determined that an asset has maximized its value.