Insurance: Frankfurter Leben is struggling with problem cases in its private credit portfolio

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 loan fund run by HAGIM, 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.