With our digital wealth management, we were already among the pioneers in Germany back in 2014. Separately from that, but with the same pioneering spirit, we now want to make real assets digitally and easily accessible too. Where the two offerings have things in common, and where they differ.
Digitalisation keeps creating new possibilities. In investing, quirion has been actively shaping this development for many years. Now we are adding real assets such as real estate to our offering as well. „We want to make these simply, cheaply and digitally accessible,“ explains our CEO Martin Daut. Removing barriers, making investing even more digital and even simpler: that was already the idea behind quirion's launch as a robo-advisor in 2014. From the very beginning, digital wealth management was about investing as cheaply as possible via ETFs and spreading capital as broadly as possible, particularly across the world's stock markets. None of that has changed. „In digital wealth management, we deliberately limit ourselves to the asset classes of stocks and bonds,“ explains chief economist Philipp Dobbert. „Because for these there are highly liquid and especially efficient markets, which are the foundation of our investment strategy.“
Digital securities open up new paths
The markets for real assets such as real estate work differently. Large investment sums and a long-term commitment of capital are the rule. There, you cannot take the same path as in digital wealth management. But innovative technologies have the potential to create entirely new points of access in the real-assets segment. So-called digital securities streamline the process and reduce costs considerably. The investments are thus implemented using blockchain-based technology. „Tokens“ are used for this. Here, these correspond to an entitlement or share certificate. Digitalisation saves a great deal of effort compared with classic securities administration. A legal basis is provided by the new „Act on the Introduction of Electronic Securities“, even if for now this covers only bearer bonds. That is a form of financing that is also well suited to real-estate projects.
In a first offer, quirion is therefore focusing on investments in financing — in this case, of two premium properties in Leipzig. These are possible from as little as €500. In return, you receive a fixed interest rate of 3 percent per year. Further projects and offers will follow.
Removing barriers
Wealth management on the one hand, a real-assets offering for real estate on the other: what the two have in common is digital access and the ambition to remove barriers. „We know of numerous investors who shy away from the real-estate asset class, chiefly because of the high capital requirement and the long-term fixed commitment,“ reports Dobbert. Digital securities can break down obstacles like these. „Even so, investors can — unlike with open-ended real-estate funds, for example — bet very specifically on individual projects they are convinced by.“
As a general rule, with the real-estate asset class its value does not fluctuate as strongly as with stocks. „After all, properties are not bought and sold every day, so they hold their value more steadily,“ explains Dobbert. „On the other hand, the concentration risks are higher compared with a broadly diversified ETF.“ By investing as an admixture, however, this risk is more easily limited on an individual basis. Stocks of real-estate companies or of special real estate investment trusts (REITs) do offer such advantages, too. „But with those you end up with a stock investment carrying the risk profile of that asset class.“
Prospects for the future
Real estate is just one example of real assets where digitalisation opens up new prospects. „In principle, this path makes it possible to open up infrastructure projects, art or classic cars as an investment for those who have not had access to such assets so far. They can all be tokenised,“ CEO Daut points out. „In any case, we are firmly resolved to approach the real-assets segment with a pioneering spirit.“
More about the new offer can be found here.
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