The life insurer has lent hundreds of millions in the private credit markets. A dozen investments are in crisis. The company emphasizes that losses are not to be feared.
Real estate entrepreneur Reppegather (left), Gröner: The life insurer Frankfurter Leben has financed several crisis-stricken project developers. Photo: Imago, City of Düsseldorf, Getty Images, unsplash, brckmnn [M]
Frankfurt. At the insurer Frankfurter Leben, problems with exposure to the private credit markets are increasing. According to Handelsblatt research, two investment vehicles from the fund subsidiary HAGIM are particularly affected. Together they have a volume of around 590 million euros.
One of the funds provided subordinated real estate financing to project developers in Germany and Austria. Of the 17 initial financings, the fund had to restructure ten loans and write off two others completely. This was confirmed by Frankfurter Leben in response to a Handelsblatt inquiry.
However, the company emphasizes that the real estate financing portfolio had an average annual return after costs of 2.85 percent despite the write-downs in the second quarter of 2026. “This does not correspond to the target return originally envisaged, but given the distortions in the real estate market, it is an excellent result.”
There were also violations of loan conditions and postponed interest payments in a second HAGIM loan fund, which grants loans to medium-sized companies in Europe. Upon request, Frankfurter Leben admits a “very low need for depreciation”. The annual net return was also positive at just under five percent. The company emphasizes: “All payment obligations are guaranteed at all times and without restrictions.”
The problem cases in the insurer's private market portfolio are explosive, even if the insured have not suffered any losses so far, according to Frankfurter Leben. The company is in the hot phase of an important deal. A look at the portfolio of real estate loans also reveals: Over the past two years, the fund subsidiary has had to contend with dazzling bankruptcies, convicted fraudsters and a Russian bank in liquidation.
Frankfurter Leben is a so-called run-off life insurer. It takes over existing contracts from other insurers who do not want to continue them for cost reasons. It invests the premium payments of the insured primarily through the asset manager HAGIM, which is part of the group.
Private market investments such as private equity, infrastructure or private credit play an important role in HAGIM's investment strategy. “Investments in private markets are an important part of further improving profitability,” says Frankfurter Leben’s financial report.
Private credit commitments in the focus of supervisors
However, such investments attract the attention of financial regulators. Bafin Executive Director Julia Wiens announced in May 2025 that she would focus more on life insurers' private credit investments - in particular on risk management and staffing.
It is of central importance that the company presents a good image, as the further growth of Frankfurter Leben depends on the goodwill of the supervisory authority. Since run-off insurers do not do any new business, they have to regularly purchase additional policy portfolios.
Frankfurter Leben announced in August 2026 that it wanted to take over the German business of the Athora insurance group with financial support from DWS. With the transaction, Frankfurter Leben would grow to around 800,000 customers and an investment volume of around 17 billion euros. Bafin still has to approve the transaction. Those involved expect a conclusion in mid-2027.
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The central investment vehicle for Frankfurter Leben's private market investments is a Luxembourg fund of funds called “Infinity SCS Sicav-Raif”. Upon request, Frankfurter Leben confirmed that only money from its own insured persons was invested there.
The investment company Prime Capital has the mandate as an external portfolio manager (alternative investment fund manager, AIFM) and as such is responsible, among other things, for risk management. Handelsblatt has evaluated the annual report for the financial year ending in June 2025 of the Luxembourg fund “Infinity SCS Sicav-Raif”.
Risks are particularly apparent in the EUR 374 million sub-fund for subordinated real estate financing. HAGIM launched it with the Munich investment house Lenwood. The report states literally about the “Infinity HAGIM Lenwood RED I”: “The fund continues to face significant challenges, both at the portfolio level and at the individual stock level.” There is also talk of an “increased number of non-performing and at-risk loans”.
A “Who’s Who” of real estate bankrupts
A look at the fund's individual investments shows what this means. The portfolio as of mid-2025 reads like a “Who’s Who” of real estate bankrupts:
The real estate fund lent almost 40 million euros to three projects of the now insolvent Düsseldorf Centrum Group. Founder Uwe Reppegather has been in custody since April 2026 on suspicion of fraud and bankruptcy.
A Leipzig real estate project by the fallen real estate investor Christoph Gröner received 25 million euros.
A further 25 million flowed into two projects by the Austrian project developer LNR. The tabloid media in Austria simply call LNR boss Lukas Neugebauer “Mini-Benko”. At the beginning of 2026, a Viennese court sentenced Neugebauer to a suspended sentence for “fraudulent Krida”, i.e. bankruptcy.
The allegation of fraud is also being discussed in connection with an investment in Berlin. According to the report, 16.5 million euros flowed into the Kantstrasse project by the Berlin developer Hedera Bauwert. In July 2024, Handelsblatt revealed a scandal involving fake invoices, including in the Hedera Kantstrasse project. Hedera Bauwert rejected the fraud allegations at the time.
18.3 million euros from the HAGIM Lenwood fund also went to “Kastenbauer Straße Holding”, a commercial real estate project of the Imfarr Group in the east of Munich. Imfarr filed for bankruptcy in 2024.
Despite numerous bad news for the portfolio, Frankfurter Leben wants to restructure the loans with a profit for the insured. A total of around 160 million euros in loans have already been returned to the fund. This corresponds to 43 percent of the invested volume.
Frankfurter Leben only suffered a total loss on two loans worth 25 million euros to the Vienna-based LNR Group. Loans of over 190 million euros are still outstanding. Frankfurter Leben is trying to get their capital back through restructuring.
Fresh money to stabilize the financing structure
Loans worth almost 100 million euros have already been “completely restructured” and “ownership has been transferred,” the insurer said. Frankfurter Leben therefore had to take over the real estate that served as security. These are rented existing properties. They are to be sold by 2030 in order to fully repay the loans.
The company is currently conducting sales negotiations with “solvent prospective buyers from abroad” for other loans with a total value of around 78 million euros. Further loans totaling 11.5 million euros have also been restructured and more than two thirds have been repaid. Therefore, Frankfurter Leben currently sees no reason for further depreciation.
For comparison: other funds were hit much harder. The Verius real estate financing fund, for example, in which statutory health insurance companies, among other things, invested, has to write off more than 90 percent of financing over 1.2 billion euros.
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The HAGIM Lenwood fund also issued new loans. He used them to replace top-ranking claims from other creditors in order to stabilize the entire financing structure. This is exemplified by the project on Kastenbauer Straße in Munich, which Imfarr joined in 2021. According to the AIFM report, the German subsidiary of the Russian state bank VTB financed the project with a first-lien loan of 90 million euros.
In 2025, the fund agreed with the Russian financial institution, which was now in liquidation, to take over the first-tier claim at a discount of 35 million euros, as can be seen from the AIFM report. Frankfurter Leben boss Christian Wrede emphasizes that the company has in each case carefully examined “whether we would be better off with restructuring than in the case of non-structuring”.
If the renovation concept works, Frankfurter Leben expects an average return before costs of eight percent per year on its real estate portfolio since inception. In a negative scenario, further depreciation of almost 16 million euros can be expected. Then at the end of the term there would still be a gross return of more than six percent per year.
Insured parties finance the real estate project of the owner Fosun
Contrary to what was originally planned, Frankfurter Leben is also running a business with its owner, the Chinese Fosun Group. 20 million euros from the insured's assets invested in the real estate financing fund flowed to the Luxembourg company Acacias Property. It also belongs to the Fosun Group.
Acacias Property is behind an office property near the Frankfurt Trade Fair. The complex was designed in the early 2000s as a trading floor for Dresdner Bank, but is now empty. Fosun is currently looking for a buyer for the property. The loan would actually have been due in March 2025. However, it had to be extended, as Frankfurter Leben confirmed upon request.
According to Frankfurter Leben, this is fully secured real estate financing. The land value less any demolition costs exceeds the value of the loan. There are also guarantees. "All interest payments have been and will be paid on time. We expect full repayment in the next six months," says the insurance company.
Frankfurter Leben has already supported owner Fosun's transactions with loans once. Fosun financed the takeover of Bankhaus Lampe by Hauck & Aufhäuser via a promissory note loan from Frankfurter Leben in the three-digit million range. According to Handelsblatt information, this loan has now been repaid with interest.
The supervisory authority takes a close look at intra-group loans. Frankfurter Leben boss Wrede confirms: “Bafin knows all Fosun exposure.” Since the end of 2023, there has been an agreement with the supervisory authority to discuss all loans from Frankfurter Leben to companies affiliated with Fosun.
According to the alternative investment fund manager Prime Capital, the sub-fund “Infinity Private Debt I” is also under “close observation”. According to the fund's balance sheet, it has granted loans totaling 216 million euros to medium-sized companies in Europe. The report mentions “underperformance of several underlying investments”.
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In several cases, debtors violated loan conditions; in one case, interest was not paid as scheduled. According to Frankfurter Leben, so far the fund has only had to write off a single interest payment of less than one million euros.
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