Euler Hermes Rating assigns BBB- rating to KGAL Group

Euler Hermes Rating GmbH assessed the creditworthiness of KGAL GmbH & Co. KG for the first time and has assigned a BBB- rating. The market leading position as an investment and asset manager for real capital investments, as well as a solid revenue basis from long-term management contracts, were decisive for the evaluation of the analysts. The agency expects the rating to remain stable over the next twelve months.

Due to the group’s focus on institutional investors and the high weight of real estate investments Euler Hermes Rating identified limited diversification of revenue sources as a strategic risk. The agency assesses cyclical impacts of interest rates and the investment environment, as well as increasing competition for real capital assets, as crucial for market risk. In summary the analysts assess the business risk of KGAL GmbH & Co. KG as slightly elevated to moderate.

Taking into account high and sustainable profitability, good capital structure and appropriate financial flexibility the rating agency evaluates the financial risk of KGAL Group as moderate to low. In regard to operational risk, the analysts identify potential for improvement in the group’s finance communication during the course of the business year.

KGAL Group is an independent investment and asset manager with approximately 22.7 billion Euro of total managed investment volume, 340 employees and consolidated revenues from service and commission business of 72.7 million Euro in 2017. Investments are mainly focused on long-term real capital assets for institutional investors in the asset classes of real estate, infrastructure and aviation. KGAL was founded fifty years ago, is headquartered in Grünwald near Munich, and pursues business activities across Europe.

Euler Hermes Rating GmbH (Euler Hermes Rating) was founded in 2001 as an independent European rating agency of the Euler Hermes and Allianz Group focusing on issuer and issue ratings. Euler Hermes Rating is registered as a credit rating agency (CRA) in accordance with Regulation (EC) No 1060/2009 of the European Parliament and Council (as amended) and is considered as an external credit assessment institution (ECAI) by the European Banking Authority (EBA). Euler Hermes Rating is a subsidiary of Euler Hermes (ELE:PA), the world leader in trade credit insurance.

Further information on this rating can be found at www.eulerhermes-rating.com.

Methodology
This rating was achieved based on Euler Hermes Rating GmbH's current issuer rating method, which is published at https://www.ehrg.de/en/.

© 2018 Euler Hermes Rating GmbH (“EHRG”) and/or its licensors and affiliates. All rights reserved.

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