Alternative asset manager KGAL says that it has not been directly affected by the recent markets crash. „We have neither positions in the US nor are we directly impacted by the tariff issues“, says Co-CEO André Zücker in an interview with Börsen-Zeitung. His co-CEO Florian Martin reinforces the resilience of the Grünwald-based company near Munich: „The recent developments, with high volatility in asset classes like stocks and bonds, have no direct impact on our business model.“

KGAL notes the advantages of investing in real assets, which include predictable cash flows. Additionally, lower interest rates are easing refinancing: „The overall asset competition is decreasing, as the spreads to risk-free benchmark bonds are narrowing,, which is positive for us," says Martin.

According to Zücker, KGAL does not currently expect the short-term market disruptions to lead to a deep recession: „Under this assumption, solutions for the high demand for housing, sustainable mobility, and infrastructure for the energy transition remain a good option for investors with a long term outlook," he says. KGAL feels well-positioned with its purely European focus. The company is closely monitoring overall conditions but remains optimistic. Martin said that the situation could look different in the long term if inflation trends strengthen.

Last year, KGAL performed significantly better than expected, the two CEOs highlight. „The group's net income of nearly 21 million euros is largely driven by operational revenue“, says Martin. Ongoing fees have increased by 10 %. The higher result in the previous year was still influenced by special items. Originally, the company had expected a profit of 15 million euros in 2024.

Co-CEO André Zücker is also satisfied, saying "a profit higher than the forecast is certainly not commonplace for an asset manager of our size.“ As a medium-sized company with around 400 employees, profitability is very strong compared to the industry. At the same time, the ongoing fees completely cover the costs: „We don't have the pressure to make transactions at all costs.“

According to Martin, KGAL, which is owned by two family foundations, benefited from its market expertise last year. It had earlier stopped investments for its clients as market disruptions started, and for example already bought fewer real estate properties in Germany in 2021. As a result, capital commitments from 2022 and 2023 were carried over and utilised in 2024, says Martin: „When markets are turbulent, you eventually have to have the courage to re-enter.“ This was done last year both in real estate and in infrastructure: „The transaction volume thus adds up to 1 billion euros.“ Some new capital has also been invested. The clients are, for example, German insurers.

KGAL positions itself as a solid company with an equity ratio of around 70 %, Martin notes – many competitors, on the other hand, rely on external financing. KGAL regularly walks clients through the entire profit-and-loss statement: „They can see what we earn and what margin we have.“ It builds trust. „There's no other company that opens its balance sheet like this and really puts all the numbers on the table“, adds Zücker. For clients, a solid asset manager who doesn't just collapse during a crisis is extremely important.

The diversification across three asset classes is an advantage, emphasise the co-CEOs. The aviation sector is handled through a joint venture with Lufthansa, the infrastructure sector around renewable energies is continuously expanded, and in real estate, the focus is on buildings with different types of use and neighbourhood developments. „If one asset class doesn't perform as well, there's always compensation in another class“, says Zücker.

„We understand our investments in great depth“, states Zücker. This sets KGAL apart from some other asset managers. The company, for example, employs architects, chemists, and aircraft engineers. This approach does slightly reduce KGAL's flexibility, as it doesn’t claim to be a logistics specialist today and a data centre expert tomorrow. However: „The world doesn’t need the 18th logistics manager.“

According to Martin, while other firms in the market are also active under the term „Asset Advisory“, clients need someone who is not only able to make smart suggestions but also act as an active implementation partner.

The duo wants to align KGAL with three trends: First, to offer more „solutions“ to clients, for example through individual mandates; second, to digitize the company's units; and third, to drive innovations for clients.

Individual client solutions, where clients don't invest in a fund but instead agree to personalised mandates starting from 150 million euros, can be arranged, says Martin. For example, KGAL won one of the largest foundation mandates in Germany because the entry into renewable energies was sought with a special perspective: „You can't offer a standard product for that, but instead must provide individual solutions, such as building a separate holding company.“ The fund products will continue to be offered as well.

Currently, individual mandates make up about a third of the annual investment volume, says Martin. The share is set to increase to around half. Last year, 75 % was reached, but this was due to a special situation.

The CEO duo, which has been in place since the beginning of 2024, has also increased the IT budget, with a horizon extending until 2027. For instance, the number of employees working on IT topics has been doubled.

Martin justifies the push for digitalization on one hand with the foreseeable shortage of skilled workers and on the other hand with the need for cost-efficient service in times of lower returns on investments. Zücker explains that the company has also restructured its organisation – not by asset classes but by bundling processes such as investment management or client access across all activities: „We want to standardise these processes for all asset classes.“

Martin highlights that KGAL is also very engaged in the development of new technologies: „We really feel well-positioned when it comes to innovations because we have technical expertise in-house.“ The company is now involved in battery storage and the use of hydrogen for transport and industry. It was viewed as a major achievement when the KfW awarded KGAL the mandate for the Power-to-X development fund (PtX) with a volume of 270 million euros in a Europe-wide tender. „We're really proud of that because all the major asset managers had applied as well“, says Zücker.