Viceroy - Adler 1

Adler Group – Bond Villains
Adler Group is a stitched together and overly indebted dumpster fire, operated for the sole
benefit of a secretive, kleptocratic cabal.
OCTOBER 6, 2021 – Viceroy Research is short Adler Group SA (ETR : ADJ) and its listed subsidiaries. The Adler
Group is a hotbed of fraud, deception and financial misrepresentation designed to hide its true financial position,
which is bleak. The Adler Group exists as a conduit for its shadow directors and associates to systematically
enrich themselves to the detriment of bondholders, shareholders, and minority holders of various listed
investments.
Earlier this week, Adler announced that it had begun a “review” of a strategic sale of its yielding portfolio.
Properly accounted for: Adler has already triggered a default-event, and it does not appear its mismarked
assets can support its crippling debt. Substantial sales of Adler’s yielding portfolio will have a moot effect on
Adler’s LTV - which we calculate to be in excess of 85% - and eliminate thin operating cash-flows.
Any such “strategic” divestment will be a purely optical attempt to pay down debt, or worse, as a last chance for
undisclosed related parties to strip any remaining value in the structure.
Adler’s Modus Operandi
Adler Group’s modus operandi is to acquire or force mergers with better capitalized companies to then saddle
them with debt. Management then channels cash and assets to enrich its friends and associates via undisclosed
and blatantly uncommercial related-party transactions, many of which are never intended to be settled in full.
The related-party nature of these transactions is always hidden. This is not a matter of one or two small
transactions. This behavior is endemic and continues today.
Viceroy struggled to find any truly arm’s-length transactions Adler has undertaken in its corporate history.
Adler engages in three broad types of transactions:
“Looting Transactions” are where:
▪ An asset is bought from an Adler Group company by a related party at a deflated price; or
▪ An asset is sold to an Adler Group company by a related party at an inflated price.
Either way: value is transferred out at shareholders’ expenses.
“Marking Transactions” are where an asset is bought by an undisclosed related party at an inflated price, but
the consideration is never settled in full. Adler’s book is then artificially marked up by unrecovered receivables.
▪ Despite little cash consideration being paid, the underlying asset (e.g. development plot) changes hands.
When Adler loses control of this asset, related parties can (and do) borrow against these assets. When the
transaction is inevitably reversed, Adler receives its asset back, but with a large mortgage.
▪ These “Marking Transactions” are also laced with looting, as related parties never seems to miss an
opportunity to steal. When these deals are inevitably reversed, Adler will pay tens of millions in “JV fees” or
a penalty to the related-party buyer. Money is thus transferred out on a deal that was never intended to be
completed.
“Coup D’état Transactions” are where:
▪ Adler, often with leverage and in concert with undisclosed related parties, buys a controlling stake in an
asset-rich company. The latter is a major breach of regulatory disclosure obligations.
▪ Once Adler control the board of the target entity, they flip the board and attempt to force a merger with
the parent and proceed to loot the asset-rich target via “looting transactions” and “marking transactions”.
Viceroy Research Group 1 viceroyresearch.org

What’s Left? - An Artificially Inflated Balance Sheet Disguising a Bond Default
A historically liberal bond market has allowed Adler to fraudulently raise billions of euros against horribly
mismarked assets. Values are transferred to undisclosed related parties.
▪ Adler’s residential portfolio is valued on a DCF model backed by delusional assumptions. Adler’s derived cap
rates are ~100bps less than comps, despite an inferior portfolio.
- Viceroy’s base-case valuation derives a €2.36b impairment of Adler’s yielding Residential Portfolio.
▪ Adler’s development pipeline is booked on residual value method, which assumes project completion
despite Adler’s inability to finance and complete these projects.
- Viceroy’s base-case valuation derives a €1.77b impairment of Adler’s Development Pipeline.
▪ “Good” assets have mostly left the company via “Looting Transactions” to undisclosed related parties. What
is left is a mishmash of over-levered and mismarked assets, and unrecoverable receivables.
If properly accounted, the company is in breach of their bond covenants and would be in immediate default.
The usual assumption held by investors in property bonds is that even where cash flow or solvency issues may
arise, the company’s assets are real; even in a worst-case scenario, recoveries from liquidating the real estate
portfolio will largely cover any losses. That assumption will be sorely misplaced in this case. Bondholder money
has been looted.
Adler LTV Adjustement Estimates As Presented Viceroy Bull Viceroy Base

Net Financial Liabilities
Corporate bonds, loans & other financial liabilities (7,869,901) (7,869,901) (7,869,901)
Convertible bonds (309,313) (309,313) (309,313)
Cash & other discretionary financial assets 1,255,116 1,255,116 1,255,116
Reported Net Financial Liabilities (6,924,098) (6,924,098) (6,924,098)
Gross asset value
Fair value of properties 12,570,345 12,570,345 12,570,345
Investment in real estate companies 84,716 84,716 84,716
Reported GAV 12,655,061 12,655,061 12,655,061
Viceroy Adjustments
Investment Property
less: Residential Portfolio adjustment (p. 24) (1,572,405) (2,363,017)
less: Development & Inventory Portfolio adjustment (p. 27) (1,064,466) (1,774,110)
Total Portfolio adjustment (2,636,871) (4,137,127)
Other Adjustments (449,100) (528,100)
Total adjustments (3,085,971) (4,665,227)
Viceroy Adjusted GAV N/A 9,569,090 7,989,834
LTV inc Convertibles 54.71% 72.36% 86.66%

LTV exc Convertibles 52.27% 69.13% 82.79%
Figure 1 – Viceroy LTV Adjustments
Viceroy’s analysis is based on publicly available information.
We believe our adjustments only scratch the surface of the impropriety at Adler.

The Kleptocrats – Shadow Directors
Adler is controlled by an undisclosed cabal of kleptocrats which we believe have systematically asset-stripped
Adler and its subsidiaries for over a decade.
▪ This cabal is headed by secretive financier Cevdet Caner, who was previously responsible for the second
largest REIT collapse in German history: Level One.
▪ Caner now operates Adler from a yacht in Monaco. Despite holding no official position at the company and
claiming to be no more than a consultant, Caner’s control is an open secret and has drawn the attention of
Israeli and German authorities.
▪ Caner’s wife, brother-in-law, and other associates from Caner’s failed Level One venture own or hold senior
positions at various related-party entities. These related-party entities act covertly and in concert with Adler
in the commission of its schemes.
The Looting – Unjust Enrichment of Friends and Fraud
Adler systematically uses underhanded tactics to acquire better-capitalized companies only to strip them of
resources and assets in uncommercial transactions with related parties, or to leverage them to the hilt to enable
more looting.
Gerresheim – “Marking Transaction”
▪ A 75% stake in a project owned by Brack (an Adler subsidiary) was sold to an entity ultimately controlled by
Caner’s brother-in-law at an inflated price, of which only a third has been paid.
▪ This created fake paper profits on Brack’s (and hence Adler’s) balance sheet, which allowed Adler to borrow
more money.
▪ The Gerresheim transaction has subsequently been reversed, and Adler has disclosed no major works have
been completed due to ongoing disputes with permitting entities and the German national railway
company.
▪ A mortgage was taken out against the underlying Gerresheim property by the new “owners” to the sum of
€145m. A loan from Adler was also granted to the holding SPV for the sum of €75m to date. On reversal,
there is insufficient cash to repay these loans. Where has this cash gone?
ADO Properties – “Coup d’état Transaction”

▪ Adler Real Estate entered into an aggressive business combination with ADO Properties. Adler effectively
took control of ADO with a relatively small stake financed by a bridging loan. ADO was ripe for looting.
▪ ADO Properties (now controlled by “old Adler”) acquired Adler Real Estate and renamed itself “Adler
Group”. Now in full control of a better capitalized entity: the kleptocrats continued looting.
Consus – “Looting Transaction”

▪ Consus is Adler’s biggest looting transaction, and largely responsible for Adler’s negative debt ratings. Prior
to acquisition, Consus was a thinly capitalized developer owned by undisclosed related parties and with
considerable debt: demanding interest in excess of 20%.
▪ Consus was formed when a shell company acquired a 59% stake in CG Gruppe from related party and major
shareholder, Aggregate Holdings, for €800m. Aggregate acquired this same asset for €49m less than a year
prior.
▪ Prior to Adler purchasing its full stake in Consus, the company was looted for everything of value (which
already was not much) by insiders and associates. It was then foisted onto Adler shareholders.

The Aftermath – Stakeholders on Notice
▪ Bond Default: Any entity subjected to the “business practices” referred to above will inevitably be hollowed
out. By our calculations, and using reasonable assumptions, Adler would be substantially in breach of its bond
covenants. A loan-to-value (LTV) covenant breach constitutes a default-event under Adler’s bond terms, which
in turn means its bonds become immediately due and payable.
- Adler has insufficient liquidity to repay its bonds in a default scenario and does not have good assets to
pledge or sell to raise money in an emergency.
- Adler conceals its true leverage by changing the way certain figures (e.g. LTV) are calculated and recording
semi-sham transactions that allow it to realize paper gains and fabricate deductions against its debt.
▪ Adler will face significant issues obtaining further finance when lenders realize they have been fooled. This would
immediately result in a liquidity crisis and technical insolvency.
We believe Adler‘s balance sheet has been artificially inflated to mask a default event, with questionable
chances of full recovery if Adler loses access to funding and its ability to refinance its ever-increasing debt.
▪ An Auditor under investigation: Adler Real Estate AG’s auditors, Ebner Stolz, is now under investigation for
serious audit failures surrounding “imaginary invoices that are unlikely to be collected” at Greensill. Adler is
Ebner Stolz’s largest client after Greensill.
- Adler’s receivable balance exceeds €1b, much of which is unlikely to be collectable, some of which is from
Caner associates and undisclosed related parties. In absence of generous payment terms provided by Adler,
some of these receivables are overdue by up to 4 years.
▪ Authorities already intervening: Regulators have their sights set on Adler.
- The Israel Securities Authority has already intervened in Adler’s handling of the Gerresheim Transaction,
forcing the disclosure of Caner’s brother-in-law as the purchasing counterparty.
- Questions have been raised by German MP’s regarding BaFin’s actions, or lack thereof, around Adler.
- ADO shareholders also unsuccessfully appealed to BaFin to put a stop to the ADO Properties acquisition of
Adler.
The Grim Conclusion
Adler’s business is built on systemic dishonesty and fraud to enrich friends and associates. Its balance sheet has
been artificially inflated to a significant degree, its shares are not investible, and its bonds are almost certain to
default with very large impairments.
The business practices at Adler and amongst its kleptocratic network are not simply sharp dealing, they amount
to gross dishonesty and fraud, and the roll-up nature of the company makes any financial analysis time-
consuming and difficult. There are significant regulatory issues at play, and we expect authorities may soon act.
For these reasons we refuse to assign a target price to Adler’s shares and believe they are un-investable.
Note: to avoid confusion Viceroy refer to Adler Real Estate AG as “Adler Real Estate” and Adler Group SA (formerly
ADO Properties) as “Adler Group” for events following its renaming.

Postscript – Letters to the Editors
On 5 October 2021, at 11:06am (Berlin Local Time), Adler’s General Counsel, Dr Florian Sitta, emailed Viceroy
Research to address “certain rumors” that Viceroy intended to publish a report on Adler.
Following this email, Viceroy Research received a further email at 12:52pm from the lawyers of Aggregate
Holdings: the largest shareholder of Adler.
Aggregate’s lawyers suggested that our report will be somehow defamatory to their client. We had not made
our report available to neither Adler nor Aggregate.
We leave it to the readers to determine if this is a faux-pas demonstrating the intertwined nature of Adler’s
kleptocratic cabal.
Aggregate’s lawyers subsequently requested an advanced copy of our report (which we did not send) and
requested to make “pre-publication steps” and respond to our reported opinions. We believe there has been
sufficient time for Adler to make these disclosures on their own initiative.
Viceroy have been researching Adler since last year, alongside more than a dozen other listed companies. We
do not make the determination to publish a report unless we think the story is compelling, and not until we have
sufficiently referenced our claims.
We had previously abandoned Adler for other projects, and only returned to it after incessant rumors that we
must have been involved in the company’s spectacular decline over the past 12 months. It piqued our interest
enough that we revisited our notes and kept on digging.
That everyone already believed Adler was a fraud meant that there was likely more to be found.
You can find a copy of both the email from Dr Sitta and the letter from Aggregate’s lawyers in Annexure 10 –
Letters from Adler and Aggregate’s Lawyers on page 59

Contents
Postscript: ........................................................................................................................................................... 5
1. The Inner Circle – Cevdet Caner and his Cronies ............................................................................................ 8
Who is Cevdet Caner?......................................................................................................................................... 8
2. Adler’s Modus Operandi ............................................................................................................................... 10
Gerresheim fraud: A “Marking Transaction” .................................................................................................... 11
ADO Properties – A “Coup D’état Transaction” ................................................................................................ 17
Consus – the largest of the “looting transactions” ........................................................................................... 20
3. Residential Portfolio – Valuation Flaws ........................................................................................................ 23
Desktop valuations ........................................................................................................................................... 24
Determining an Appropriate Capitalization Rate ............................................................................................. 24
Logical Fallacies – Correcting Fatal Flaws ......................................................................................................... 25
Deriving the Discount Model ............................................................................................................................ 27
4. Development Portfolio – Valuation Flaws .................................................................................................... 28
What is the Residual Value Method? ............................................................................................................... 28
Development Case Study - The VauVau Reversal ............................................................................................. 29
Fair Market Value ............................................................................................................................................. 32
5. Loan-to-Value Analysis – Un-Cooking the Books .......................................................................................... 33
Revised LTV Calculations .................................................................................................................................. 35
Ebner Stolz – Déjà Vu ........................................................................................................................................ 36
Kicking Out KPMG ............................................................................................................................................. 36
6. Bond Summary ............................................................................................................................................. 37
7. Conclusion .................................................................................................................................................... 38
Annexure 1 – The Inner Circle .............................................................................................................................. 39
Annexure 2 – Mezzanine and Aggregate .............................................................................................................. 40
Mezzanine IX Investors ..................................................................................................................................... 40
Aggregate Holdings ........................................................................................................................................... 41
Annexure 3 – The Brack Deception ...................................................................................................................... 42
Annexure 4 – Accentro: Overdue ......................................................................................................................... 44
Annexure 5 – Consus: Thoroughly Pillaged .......................................................................................................... 46
Consus’s Transaction with Gröner (after the deal with ADO was announced) ................................................ 46
Portfolio Sale to Natig Ganiyev ......................................................................................................................... 47
Annexure 6 – Conwert: Denied ............................................................................................................................ 49
Annexure 7 – CLC AG ............................................................................................................................................ 52
Annexure 8 – Level One ........................................................................................................................................ 53
Annexure 9 - Deutscher Bundestag Member Letter to BaFin .............................................................................. 54
Translated – Bundestag Letter to BaFin ........................................................................................................... 57

Attention: Whistleblowers
Viceroy encourage any parties with information pertaining to misconduct within Adler Group, its affiliates, or any other entity
to file a report with the appropriate regulatory body.
We also understand first-hand the retaliation whistleblowers sometimes face for championing these issues. Where possible,
Viceroy is happy act as intermediaries in providing information to regulators and reporting information in the public interest
in order to protect the identities of whistleblowers.
You can contact the Viceroy team via email on viceroy@viceroyresearch.com.
About Viceroy
Viceroy Research are an investigative financial research group. As global markets become increasingly opaque and complex
– and traditional gatekeepers and safeguards often compromised – investors and shareholders are at greater risk than ever
of being misled or uninformed by public companies and their promoters and sponsors. Our mission is to sift fact from fiction
and encourage greater management accountability through transparency in reporting and disclosure by public companies
and overall improve the quality of global capital markets.
Important Disclaimer – Please read before continuing
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Thank you to several journalists
Parts of this international mystery have been uncovered by several exceptional pieces of investigative
journalism. We will reference these, as well as expand on them and tie them together.

1. The Inner Circle – Cevdet Caner and his Cronies
Who is Cevdet Caner?
Cevdet Caner is the real controller of the Adler Group of companies. Caner has already spearheaded two listed
bankruptcies: real estate developer Level One (the second largest real estate bankruptcy in German history) and
telecom company CLC AG.
Caner was charged with “conspiracy, aggravated commercial fraud, fraudulent insolvency, and money
laundering” over Level One but was ultimately acquitted. There appears to have been considerable evidence
that Level One was looted but the evidence to point to an individual was thin1.
On paper Caner claims to be a consultant for Adler but numerous regulatory documents and investigative
journalism pieces make it very clear that Caner calls the shots.
You can find case studies on Caner’s failed ventures attached to this report in Annexure 7 – CLC AG and
Annexure 8 – Level One on page 52 and page 53, respectively.
How Do We Know?
That Adler Real Estate operates under the express influence of Cevdet Caner is already a matter of public record.
Caner, while controlling Adler, has already been involved in serious regulatory breaches by acting in concert with
undisclosed related entities.
The Austrian Takeover Commission determined the following in Adler’s failed “Coup D’état” attempt at
Conwert:
“This and other discussions mostly took place in the presence of Cevdet Caner, who, according to the management of
Conwert, appears as the ‘undercover boss’ of Adler.”
“The role of major shareholder Caner
at Adler is disputed. He does not hold
an official position. Adler says: "He
advises various Adler investors and
advises Adler on certain transactions
in individual cases." However, several
business partners refer to Caner as
"pulling the string" and the "man
behind Adler". People around the
company say he sits at the table during
negotiations. Adler says business is
conducted by the board of directors in
coordination with the supervisory
board. What the industry insiders say
sounds more like a secret boss than a
companion who occasionally pulls in a
deal.”
Figures 2 & 3 Quoting the Austrian Takeover Commission report & Adler aus der Asche2
1 www.dpa-international.com/topic/victory-acquittal-cevdet-caner-urn%3Anewsml%3Anewsaktuell.de%3A20200917%3A41519752
2
https://www.wiwo.de/finanzen/immobilien/adler-real-estate-kein-offizielles-amt/12609590-2.html
On this occasion, the undisclosed related-party nature of the transaction was picked up by the authorities. This
was a “Coup D’état” transaction, but it failed after the authorities intervened. The European Court of Justice
later found that the Austrian Takeover Commission overreached in its decision but did not dispute its findings3.
On a more comprehensive review, Viceroy struggle to find transactions in Adler’s corporate history that were
conducted at arm’s length. Adler’s dealings substantially benefit of Cevdet’s cronies.
You can find a more comprehensive account of the events at Conwert attached to this report in Annexure 6 –
Conwert: Denied on page 49.
Show me the Cronies

Caner appears at the center of a circle of insiders who benefit from complex, uncommercial transactions at the
expense of shareholders and bondholders of Adler. These schemes often operate in parallel and involve the
inflation of asset values through related-party dealings and asset-stripping.
You can find a list of Caner’s inner circle attached to this report in Annexure 1 – The Inner Circle on page 39.
Show me the Related Parties

Two entities come up again and again in Adler’s dealings: Aggregate Holdings SA and Mezzanine IX Investors
SA4.
Mezzanine IX Investors SA is a Luxembourg entity controlled by Caner through his associates: the company is
66% owned by Caner’s wife Gerda Caner and Josef Schrattbauer. The Austrian Takeover Commission confirmed
in its review of the Conwert transaction that Schrattbauer is Canner’s brother-in-law.
Aggregate Holdings is the wholly owned investment vehicle of Gunther Walcher5, the founder of Skidata AG.
Viceroy have been reliably informed that Walcher was a major investor in Caner’s Level One company. Despite
the eventual collapse of Level One, Walcher and Caner have remained close with Aggregate allegedly carrying
out Caner’s instructions to the letter.
Caner and his associates are often on both sides of Adler transactions. The goal of these transactions is to extract
wealth from investors and bondholders and siphon it to Caner’s circle, as well as to optically shore up Adler’s
balance sheet.
You can find a more on Aggregate and Mezzanine Investors IX attached to this report in Annexure 2 – Mezzanine
and Aggregate on page 40.
3 https://www.dgap.de/dgap/News/corporate/adler-welcomes-finding-the-european-court-justice-austrian-takeover-commission-does-
not-comply-with-european-law-notices-against-adler-irrelevant/?companyID=385462&newsID=1474844
4 Visit https://www.lbr.lu/mjrcs/jsp/IndexActionNotSecured.action?time=1615816035870 and search for “Mezzanine Investors IX” and
“Aggregate Holdings”
5 https://www.aggregateholdings.com/media/pages/investors/exchange-offer/2346078420-1610726594/aggregate-offering-
memorandum-final.pdf
2. Adler’s Modus Operandi
Adler systematically engage in uncommercial transactions with undisclosed related parties. Viceroy have
uncovered many of these and flagged many more for follow-up. It is likely that we have barely scratched the
surface.
In an attempt at brevity, we have included only three of these transactions in our main report, which we believe
are most demonstrative of Adler’s Modus Operandi:
1. “Marking Transaction”: Gerresheim sale and reversal

2. “Coup D’état Transaction”: The Adler-ADO-Consus three-way combination
3. “Looting Transaction”: Asset stripping at Consus
For completeness, we have Annexed further detailed transactions to the back of the report:
Brack Capital Properties: Watch this hand… – Annexure 3
▪ An Israel-listed developer taken over by Adler only to have its prime asset sold to Caner’s brother-in-law for
next to nothing and acquire an undisclosed stake in Consus, to Aggregate’s benefit.
Natig Ganiyev: Overdue – Annexures 4 & 5
▪ A series of yet-to-be-paid transactions with Natig Ganiyev, an individual with ties to corruption in
Azerbaijan’s ruling family. Ganiyev appears to be a serial non-payer with some receivables sitting on Adler’s
balance sheet for almost 4 years and counting.
Consus: Thoroughly Pillaged – Annexure 5
▪ A heavily indebted real estate developer sold by Aggregate to the unwilling buyer, ADO Properties. Consus
was the victim of extensive looting by Aggregate, CEO Christoph Gröner, and Natig Ganiyev.
Conwert: Denied – Annexure 6
▪ An Austrian residential real estate developer with most of its portfolio in Germany. This is the first apparent
example of Caner’s tricks at Adler and an introduction to Caner’s inner circle.
The sheer number of related-party transactions and how blatantly uncommercial they appear are alarming.
Viceroy have never encountered what we believe to be such brazen theft.
Viceroy vehemently refute any assertion that Adler resorted to fraud for survival. We believe Adler’s shadow
directors undertook a conscious and concerted effort to defraud stakeholders at every level.

Gerresheim fraud: A “Marking Transaction”
The Gerresheim transaction displays Adler’s methods for mismarking its book. As we recently found out, this
transaction will be reversed. The mismarking of Adler’s book and the significant looting however, will not be
reversed.
The Gerresheim property is the site of a defunct glass factory in Dusseldorf. This factory was decommissioned
around 2005. The project changed hands to property developers who had expected completion in 2015. The site
remains substantially untouched to this day.
Gerresheim Overview
▪ Brack Capital Properties, at the time not owned by Adler, purchased the Gerresheim property with
development plans from Patrizia AG in 2017 for €142m. 18 months later after becoming a subsidiary of
Adler, Brack sold 75% of the Special Purpose Vehicle (SPV), Glasmacherviertel GmbH & Co. KG, holding the
property to an undisclosed related party at a valuation of €375m. This resulted in a net ~€233m fair value
gain on Adler’s balance sheet.
▪ The Israeli regulator forced the disclosure of the undisclosed purchaser: Joseph Schrattbauer, Cevdet
Caner’s brother-in-law.
▪ Consistent with “Marking Transactions”, the €214m purchase price for the majority stake in the SPV was
not paid in full. To date, only €79m partial consideration has been “paid”.
▪ Despite consideration not being paid in full, the SPV was transferred to Schrattbauer without adequate
collateral being taken. While under Schrattbauer’s control the mortgage on the underlying Gerresheim
property was increased from €90m to €145m.
▪ To date, the SPV has racked up €75m of further loans from Adler which also remain unpaid. Viceroy believe
this loan largely financed Schrattbauer’s €79m partial payment.
▪ The project’s development proposal is on hold. Adler will receive its asset back with more debt attached:
an unjustified markup. The cash loaned to the SPV has also largely disappeared.
Viceroy asserts that this consideration was never meant to be paid in full. Schrattbauer appears to have had very
little capital at risk at any stage – and was effectively granted a free option on the Gerresheim development.
However, this created a mark-up on Adler’s balance sheet which has not been reversed.
Gerresheim Marking Analysis

Brack Purchase Gerresheim
Purchase Price €m 142
Brack Sell 75% of Gerresheim to Schrattbauer

Sale price €m 375
Fake Marking on "Sale" €m 233
Figure 4 – Viceroy Analysis of Gerresheim “Marking Transaction”
You can find more on Adler’s acquisition of Brack and the Gerresheim development in Annexure 3 – The Brack
Deception on page 42.
The remainder of this section details the chronology of events surrounding this transaction.

Brack’s sale of the Gerresheim development
Adler’s stock jumped in September 2019 on news of the “sale” of 75% of Brack’s Gerresheim project at an
implied valuation of €375m to “a third-party buyer and real estate investor focusing on real estate projects in
Germany”6.
Figures 5 Brack Annual Report FY 20177
This unnamed third-party buyer was Caner’s brother-in-law Josef Schrattbauer. We know because he was forced
to self-disclose after complaints to the Israeli regulators. Brack (under Adler control) claimed that it wasn’t aware
of Schrattbauer’s related-party status and subsequently created a memorandum stating that these relationships
were negligible and immaterial.
The purchaser under the Gerresheim Share Purchase Agreement is a privately owned German corporation
(the "Purchaser"). The ultimate controlling shareholder in the purchaser ("UB") is Mr. Josef Schrattbauer
Figure 6 Brack Capital Properties TASE announcement dated June 27, 2020 and translation
To be clear: Viceroy believe that Schrattbauer is acting on behalf of – and for the benefit of – Cevdet Caner in
the Gerresheim transaction.
Figure 7 Diagram of the Gerresheim transaction
Brack had purchased the property a little over a year earlier in December 2017 for €142m from listed developer
Patrizia AG8. We suspect Patrizia probably sold the site in frustration, as they had expected a completed project
by 20159.
The rapid “resale” of this asset allowed a generous mark-up of Adler book. We believe this was fictitious as Adler
did not receive cash and the transaction is now being reversed. We examine how much cash Adler should have
received, and what it actually received.
6 https://bcp-nv.com/wp-content/uploads/2019/05/BCP-DirI think ectors-report-Q3-EN-2019_12.11.19.ODF.pdf

7 https://bcp-nv.com/wp-content/uploads/2018/06/BCP_YR17_final_07062018_isa.pdf
8 https://www.patrizia.ag/en/news-detail/patrizia-sells-glasmacherviertel-development-in-duesseldorf/
9
Patrizia Annual Report 2012
Brack supposedly “sold” 75% of the Gerresheim SPV for an implied valuation of €375m. If this transaction were
consummated, they would have been due €214 million as per the following calculation. Note the Gerresheim
asset had an existing €90 million mortgage.
Gerresheim Marking Analysis

Gerresheim Property Value €m 375
Less: Project Debt €m 90
Net Project Value on Sale €m 285
75% Sale Cash Consideration €m 214
25% FV Stake Retained €m 71
Original Purchase Price €m 142
Fake Marking on "Sale" €m 233
Figure 8 Sale to Schrattbauer – Viceroy Analysis
The conditions for tranche payments of consideration were far from “customary”, involving the publishing of a
development plan and obtaining building permits.
As we will demonstrate below the total consideration received to date is only €79 million and Viceroy believes
that most or all of that sum was financed by Adler. This afforded Schrattbauer an “option” in a massive
development parcel where, if permitting was unsuccessful, he could cancel the deal and leave Adler with an
undeveloped lot.
The Secured Loan - €145m

On December 26, 2019, 3 months before the transaction was approved by German Antitrust Authority, Brack
signed an amendment to the Gerresheim deal whereby the Gerresheim SPV, Glasmacherviertel GmbH & Co.,
took out a €132m loan against the property. As of today, this has accrued to €145m, as analysts confirmed with
Adler’s investor relations.
This loan was guaranteed by Adler even though the property was substantially owned by Schrattbauer.
Figure 9 Brack Capital Properties TASE announcement dated December 29, 2019, translated10
This new loan would be partially used to refinance the €90m existing mortgage. The remaining money was paid
to Adler as part of the first installment of the sale proceeds – it was used to pay the down-payment.
In case Schrattbauer could not pay the remaining consideration, Adler would receive its property back but now
with an additional mortgage. This is exactly what happened.
On reversal, Adler will receive the Gerresheim SPV back with a mortgage €55m larger (now €145m). There is
insufficient cash at the SPV to cover this excess.
10
https://maya.tase.co.il/reports/details/1270900/2/0
The Adler “Friends and Family” Loan
On March 31, 2020, Brack announced that it had had transferred the 75% ownership of the Gerresheim SPV to
an undisclosed third-party buyer (now known to be Caner’s brother-in-law). They had received only €36m in
initial consideration at the time11. We have calculated the consideration paid to date as ~€79m.
Gerresheim Theft Analysis

Project Value - Sale to Schrattbauer
Gerresheim Property Value €m 375
Less: Project Debt €m 90
Net Project Value €m 285
75% Sale Cash Consideration €m 214
25% FV Stake Retained €m 71
Outstanding Consideration €m 135
Payment Made to Q2 2021 €m 79
Figure 10 Gerresheim Theft Analysis – Viceroy Analysis
The purchase price due on the transaction was €214m, and a €134.5m balance remains booked as a “receivable”
as of Q2 2021 per the following disclosure. Adler also disclosed that it lent €75m to the SPV since the sale:
Figures 11 & 12 Adler Group Q2 2021 Report extracts
Funds in the SPV were being used to pay installments on the purchase price of the SPV; it is likely that Adler
received no net money on the “sale” of the Gerresheim property.
Here is the balance sheet of the Gerresheim SPV as disclosed in Adler’s 2020 annual report:
11
https://maya.tase.co.il/reports/details/1287842/2/0
Figure 13 Adler Group 2020 Annual Report
Note that there are €249m in liabilities, comprised of
1. The €145m mortgage from an unnamed lender.

2. The €75m loan to the SPV from Adler.
3. ~€29m of other undisclosed liabilities.
Given the SPV’s operating loss in 2020 was only €1.1m and the idle asset could accumulate no capex: it is very
hard to see how (or why) the SPV accumulated the additional liabilities and retained such little cash.
The €75m in cash lent to the SPV by Adler has whittled its way down to €44m at most. When an analyst spoke
to Adler investor relations, they indicated that there was substantially no cash left at the SPV.
There is no clear explanation as to where this cash went. Shareholders should request a more detail financial
report of Glasmacherviertel to find out where this money went.
We believe the primary purpose of this transaction was not looting; it was to mark-up Adler’s book at an
inflated value and take advantage of loose credit markets. Unsurprisingly, Schrattbauer appear to have also
taken the opportunity to loot Gerresheim via project leverage.

Suckers All Along – Revaluation on Reversal
In their Q2 2021 report Adler said it was reversing the sale of the Gerresheim project due to continued planning
delays and objections by Deutsche Bahn AG, the state-owned railway company. We believe that Caner and
Schrattbauer were tiring of the whole charade and wanted to offload Gerresheim back to Adler.
Figures 14 & 15 Adler Group Q2 2021 Report extracts
Adler Co-CEO Beaudemoulin confirmed that Schrattbauer would be getting out of the deal effectively for free
and that Adler would indeed be taking back the debt attached to the Gerresheim property.
Viceroy suspect that upon reversal Adler will attempt to reimburse Schrattbauer for the €79m partial
consideration paid to date, which we have shown appears to have been funded by Adler. Stakeholders should
be on the lookout for statements surrounding this reversal.
Gerresheim – KEY TAKEAWAYS
▪ The purpose of Gerresheim transaction was to create a fraudulent mark-up on Adler’s books. They booked
a huge mark-up and the stock responded accordingly.
▪ The core transaction was conducted with Josef Schrattbauer, Cevdet Caner’s brother-in-law – an
undisclosed related party.
▪ The majority of the proceeds of the sale were never received in cash and we doubt there was any intention
to receive full consideration: only small sums were paid down.
▪ Adler is now getting its asset back with a mortgage €55m larger (now €145m) which is guaranteed by Adler.
▪ As of Q2 2021 Adler has loaned €75m to the Gerresheim SPV, which is likely non-recoverable on
consolidation as there is limited cash in the SPV.
▪ Whilst the transaction is clearly a “marking transaction”, at Adler any opportunity for looting is a good
opportunity. Despite their substantial cash loans and low expenses, there appears be little cash left at the
SPV and no explanation as to where it went.
▪ Development at the site has been stalled for years, with major permitting issues and opposition from state-
owned enterprises.
▪ Adler bought a development lot for €142m and they hold it on their books at, or above, €375m, marking
the book up by at least €233m. Gerresheim is likely not worth even the original €142m and yet there is
€145m mortgage against this asset guaranteed by Adler.
▪ Incidentally this higher valuation for the property and “gains” concocted from this sham transaction allowed
Adler to leverage against this marking transaction.
To be clear we do not believe Schrattbauer came up with this scheme himself. As in the events at Conwert, we
believe Schrattbauer is operating on Caner’s behalf. This project will likely never be completed (especially by
Adler), yet management continue to value ALL their development projects, including Gerresheim, at residual
value.
More on this to come in Part 4. – Development Portfolio Valuation.

ADO Properties – A “Coup D’état Transaction”
The ADO Properties consolidation is a major “Coup D’état Transaction” which took place in 2019, and led to the
combination of Adler Real Estate, ADO Properties and Consus to form Adler Group.
Overview of ADO Properties transaction

ADO Properties was an unrelated, much larger, and much better capitalized (~20-25% LTV) real estate
investment company.
▪ On September 23, 2019, Adler acquired a 33% shareholding in ADO Properties via a private transaction. This
was financed by a bridging loan. Adler subsequently replaced much of ADO’s board.
- Despite not having a majority shareholding of ADO, it was able to leverage a board reshuffle as several
minority interests did not vote.
- In its previous Coup D’état attempt of Conwert, Adler failed to disclose that “related parties” had taken
various minority positions in Conwert stock in anticipation of the transaction: Adler effectively already
controlled Conwert. We believe it is not unreasonable to suspect this also occurred with the ADO “Coup
D’état”.
▪ Following the board reshuffle, ADO purchased Adler Real Estate at a substantial premium through a reverse
merger transaction to severe shareholder backlash.
Consistent with Adler’s “Coup D’état” transactions this ADO transaction was engineered to give Adler some LTV
breathing room and allow it to continue looting assets for the benefit of undisclosed related parties.
Without missing a beat, ADO announced it would acquire a majority stake in Consus, a thinly-capitalized
property developer, from Caner-associated Aggregate Holdings: the credit rating of ADO debt dropped
substantially on these transactions.
There was considerable angst about this transaction:
▪ ADO shareholders had been taken over by a poorly capitalized Adler and foisted a terribly capitalized
Consus.
▪ Change of control triggered a contract term that would force ADO to buy Consus – no one wanted Consus.
ADO had ensured with this poison-pill that nobody other than Adler could merge with them.
▪ Bundestag members penned a letter to the BaFin, specifically querying the due diligence conducted by the
BaFin in approving this transaction.
S&P and Moody’s both downgraded ADO Properties to BBB-/Baa3 under review due to the acquisition of Adler
and the 22.18% Consus stake12, 13. Moody’s further downgraded ADO Properties in May 2020 to Ba1 (i.e. junk)
and further again to Ba2 after the exercise of the option to acquire full control of Consus14. Both agencies noted
that ADO’s balance sheet would significantly deteriorate following the acquisitions and that the resulting entity
would face several operational issues in integration.
12 https://www.moodys.com/research/Moodys-places-the-ratings-of-ADO-Properties-SA-on-review--PR_415093
13 https://www.spglobal.com/marketintelligence/en/news-insights/trending/SkIEaBVj9Wz_UJxDdSEi6w2
14
https://www.moodys.com/research/Moodys-downgrades-ADO-Properties-to-Ba2-outlook-stable--PR_427584
Control ADO, Stack the Board, Buy Out Cronies for a Premium
On September 23, 2019, Adler acquired ADO Group, an Israeli company invested in German real estate and a
shareholder in ADO Properties, for €708m, an 83% premium to its previous closing price. This acquisition made
Adler the largest shareholder in ADO Properties with a 33.25% stake. This acquisition was funded by a “bridging
loan”.
Figure 16 Germany's Adler Real Estate to buy ADO Group for 708 mln euros - Reuters15
On December 10, 2019, there was a major reshuffle of the ADO Properties’ Board of Directors.
Amongst its incoming directors were Florian Sitta, Adler’s Head of Legal, and Dr Ben Irle, Cevdet Caner’s
lawyer16.
Although Adler’s indirect 33.25% stake in ADO Properties did not give it an absolute majority, it was enough to
give Adler control in AGM/EGM votes because not all shares were represented in such votes. The 33% was
effectively a controlling stake.
Five days after the Board reshuffle, ADO Properties announced the acquisition of Adler for stock at an implied
17.3% premium.
Figure 17 Diagram of the Adler/ADO Group/ADO Properties transaction

* Dates represent announcement of acquisitions
15 https://www.reuters.com/article/adler-ma-ado-group/germanys-adler-real-estate-to-buy-ado-group-for-708-mln-euros-idINL5N26E1YX
16
https://www.vienna.at/cevdet-cander-im-betrugsprozess-nach-milliarden-pleite-freigesprochen/6740836
Establish poison pill, save Cronies from bad investments
Once Adler got control of the well-capitalized ADO it immediately set about looting it. The main looting was
through the purchase of a controlling stake in Consus by ADO from Aggregate Holdings a related party and
Adler’s major shareholder.
▪ ADO initially purchased a 22% stake in Consus in cash for €294m – via share purchase agreements – from
“certain minority shareholders” at a ~50% premium.
- These undisclosed “certain minority shareholders” were the only people who received cash for Consus
shares – we presume these were associated with Aggregate, as Aggregate simultaneously entered the
poison pill deal. It is not unreasonable to expect this was an undisclosed related-party transaction.
Figure 18 Extract from Consus Press Release – December 15, 201917
▪ Aggregate Holdings agreed to sell its controlling stake of Consus (~51%) for ADO shares at a rate of 0.2390
ADO shares per Consus share via a call option issued to ADO.
- Aggregate was granted a put option whereby ADO Properties would have to acquire Aggregate’s Consus
shares “upon the occurrent of a change of control” at ADO for a consideration of €8.35 in cash or 0.239
newly issued ADO shares. This option prevented anyone other than the kleptocratic clique getting
control of ADO as any prospective buyers would also have to take the thinly capitalized Consus: an
asset no-one wanted.
Figure 19 Extract from Consus Press Release – December 15, 2019
This upset a lot of people, not the least ADO’s shareholders, who complained en masse to BaFin, and
bondholders who demanded early repayment 18,19. Member’s of the Bundestag led by Fabio De Masi, recently
penned a letter to the BaFin demanding to know whether any due diligence was conducted by the regulator in
the approval of this merger.
You can find the full letter from the Bundestag members to the BaFin (and translation) regarding Adler Group in
Annexure 9 – Deutsche Bundestag Member Letter to BaFin on page 54.
17 https://www.consus.ag/consus-real-estate-agpurchase-of-22-18-of-share-capital-by-ado-properties-option-for-further-50-97-consus-
shares-potential-later-offer-for-all-minority-outstanding-shares-strategic-cooperation-ag?lang=en
18 https://www.bloomberg.com/news/articles/2020-02-18/german-landlord-merger-draws-fire-from-even-more-fund-managers
19
https://www.bloombergquint.com/business/german-mega-landlord-deal-faces-investor-push-back
Consus – the largest of the “looting transactions”
Consus is the largest of many looting transactions conducted by the kleptocratic clique. Not only did the forced
acquisition of Consus from Caner associates constitute looting of ADO properties, but Consus itself had been
thoroughly pillaged prior to its acquisition by Adler. However, the looting continued between the announcement
of the acquisition and the acquisition closing date.
You can find detailed case studies of Consus Looting Transactions in Annexure 5 – Consus: Thoroughly Pillaged
on page 46.
Looting Pre-Adler
Substantial portions of Consus’ assets are intangible and work-in-progress. This is a product of absurd related-
party Looting Transactions.
▪ Consus was largely comprised of the combined entities of CG Gruppe and SSN Group. Consus had no
material assets prior to these acquisitions.
▪ In 2017 Consus acquired a 59% stake in CG Gruppe AG for €872m: €12.5m in cash and the remainder in
Consus shares. The sellers were Caner-associated Aggregate Holdings and CG Gruppe founder Christoph
Gröner.
- Aggregate Holdings had acquired their 50% stake in CG Gruppe just one year prior for €49m,
representing a ~17x profit20.
“Great business
In any case, Aggregate earned millions with Gröner's CG Group. It went like this:
As a first step, in 2016 a future subsidiary of Aggregate bought half of the CG Group
founded by Gröner. The subsidiary put the purchase price at less than 49 million
euros. In the following year, Aggregate brought this subsidiary to Consus - for the
breathtaking price of almost 800 million euros, a significant portion of which was
paid in Consus shares. This gigantic increase in value is not understandable from the
outside”
Figure 20 Man nennt ihn den Bundestrainer – Wirtschaftswoche and translation21
- This created a false balance sheet and false equity from which all other Consus looting derives. Assets
that were acquired for €49m became Consus. This can be seen in the transition of Consus’s balance
sheet between 2016 and 2017.
▪ This is not even well hidden. CG Gruppe was acquired for €872m (as disclosed below) and a goodwill balance
was recorded on the balance sheet of ~€700m.
20 https://www.wiwo.de/my/finanzen/immobilien/ado-properties-man-nennt-ihn-den-bundestrainer/25683326.html?ticket=ST-5424299-
7yCXaecSqp0dgb6sizcK-ap3
21
https://www.wiwo.de/my/finanzen/immobilien/ado-properties-man-nennt-ihn-den-bundestrainer/25683326.html
Figure 21 Consus Annual Report 2017
Christoph Gröner (an Aggregate associate) was a minority holder in CG Gruppe and Adler bought him out for
cash, albeit at lower valuation than the formation deal of Consus. We suspect that other Caner associates
received cash at high valuations.
For completeness we note that CG Gruppe’s work-in-progress assets were valued via a residual valuation –
meaning the fair value of the end-product was recognized upfront, despite CG Gruppe already being
overindebted and having no capacity to complete the projects. Realistically, these work-in-progress assets are
worth substantially less.
Other financing of Consus
The other financing of Consus is very complicated. Both before and after it listed Consus issued considerable
bearer bonds and shares. We question what serious financial institution would accept bearer bonds of an
unlisted property developer. There were also considerable convertible debts before after listing.
Figure 22 Consus Annual Report 2018
Those debts have since become debts of Adler Group and investors and bondholders should ask serious
questions about who holds these bonds and their relation, if any, to Adler Group. In the attachments we detail
assets that have been sold to undisclosed related parties which we believe have been offset against debt.

Looting in the Adler Era
Once it was clear that ADO was acquiring Consus, insiders began systematically looting Consus of remaining
value prior to the consolidation with ADO. It appears Consus signed away ~€300m in investments representing
€4.3b and 33% of its Gross Development Value on intentionally opaque terms.
For the sake of brevity, we have annexed to this report details on the following transactions which show how
Consus was looted of premium assets under the safety of its poison pill:
▪ The sale of 17 developments to former Consus CEO, Christoph Gröner

▪ The sale of 8 developments to Partners Immobilien, controlled by Natig Ganiyev, who had outstanding
receivables from a purchase from Adler from 4 years earlier.
These 2 transactions comprised ~33% of Consus’ stated Gross Development Value (GDV). Terms were never
clearly explained to investors however the possibility exists that they were settled in exchange for the above-
mentioned debt reversal.
Full consideration of these transactions has not been paid.
We question:
1. How did Gröner obtain terms so favorable to himself in his dealings with the company?
2. Which developments and investments were sold to Gröner and Partners Immobilien?
3. Were ADO Properties shareholders aware that prior to the consolidation of Consus that the company
had been systematically stripped of its assets?
4. What payment, if any, have Partners Immobilien Capital Management made to Consus?
Through these two actions Consus’ GDV fell by €4.3b. Ultimately, once ADO Properties was locked into the
acquisition of Consus, insiders stripped almost everything of value out of the company leaving ADO with an
overly indebted shell company already picked clean.

3. Residential Portfolio – Valuation Flaws
We are not sure how much reliance to place on even basic items of Adler’s income statement such as rent
received. We suspect that rent is received from undisclosed related parties and is not collected in cash. The
Bundestag representatives’ letter to the BaFin, spearheaded by Fabio De Masi, asks specific questions tangential
(and critical) to this question.
This section takes Adler’s disclosures as accurate, and we believe this is generous. We will first explain how Adler
values its portfolio and then use peer data to derive more realistic valuation inputs before arriving at a revised
valuation.
How Adler’s property is valued
Adler’s residential investment property portfolio is valued extremely aggressively.
This systematic overvaluation appears to derive from Adler’s rent growth and residual value assumptions in its
Discounted Cash Flow (DCF) valuation model. Valuations are fatally sensitive to mild adjustments in their
calculation assumptions.
▪ Adler’s residential portfolio commands some of the lowest rent per m2 and much lower than baseline
average rent against peers in all major cities. This is consistent with Adler’s strategy of acquiring properties
in B and C class districts.
▪ Adler’s rent growth assumptions are 3-5x that of its competitors, including those with similar portfolios.
▪ Adler’s Capitalization Rate is comparable to the high-end properties in high-end districts in Berlin, across its
entire portfolio. This is incompatible with B and C class properties.
▪ Adler’s DCF indicates the company is marking their portfolio to CBRE region averages – thus suggesting it
can “catch-up” to that average – without fundamentally acknowledging its portfolio is inferior.
▪ Adler’s DCF – key locations detailed below – derives cap rates for their properties in the 2.36% – 3.80%
percent range. Competitors are typically ~100bps higher. We compare Adler’s reported cap rate to cap rates
elsewhere.
Our base case analysis, which aims to reverse ridiculous assumptions and correct fatal logic flaws, suggests
Adler’s residential investment portfolio is overvalued by €2,363m, or 36%.
Adler Group - Residential Portfolio Valuation

Cap Rate Reported Generous Case* Base Case**
Berlin % 2.36% 3.33% 4.10%
Leipzig % 2.90% 3.77% 4.10%
Wilmshaven % 3.80% 3.80% 4.10%
Dulsberg % 3.74% 3.50% 4.10%
Wolfsberg % 2.91% 2.91% 4.10%
Göttinggen % 2.59% 3.10% 4.10%
Dortmund % 3.50% 4.13% 4.10%
Hannover % 3.26% 3.10% 4.10%
Other % * * 4.10%
Fair Value 8,853,959 7,281,554 6,490,942

Net Operating Income 266,129 266,129 266,129
Expected Write Off (1,572,405) (2,363,017)

* Average district Cap Rates among peers. Where not available, we revert back to Adler's cap rate
**Grand City Cap Rate - representing the most like-for-like comparison
Figure 23 – Adler Residential Portfolio – Adjustment Analysis
This section examines the ridiculous assumptions Adler use in their DCF valuation. Viceroy also analyze Adler’s
portfolio in line with its peers for what we believe is a more accurate valuation.
Desktop valuations
A critical discovery is that as Adler’s third-party valuer, CBRE does not visit any of Adler’s properties. This was
confirmed by Adler’s investor relations.
Adler’s investor relations spokesperson noted that CBRE conducts a “desk-top valuation” of the investment
portfolio, noting that “they can’t check 70,000 units”.
Maybe it’s time we hold valuation experts to the same standards as auditors.
Fundamentally flawed DCF model
Along with other German residential real estate investment companies, Adler value their investment portfolio
on a DCF basis rather than trying to estimate market value.
This may be appropriate for competitors, who invest in real estate assets with the intention to rent them out
and create a spread-based portfolio (thus, DCF).
Given Adler’s propensity to offload assets to related parties in an environment where every asset appears to
be for sale, a DCF valuation method is inherently inappropriate.
Adler’s DCF valuation model is based on subjective Level 3 assumptions. These assumptions are rigged to
produce very high valuations and thus support considerable debt. As described above the funds raised on these
valuations is systematically looted.
Determining an Appropriate Capitalization Rate

No matter how you cut it Adler has very low cap rates and hence inflated values for their properties. The simplest
comparison to demonstrate this dislocation is capitalization rates versus rents.
Rental comparison
There are widely published rental comparisons for German cities. Below we compare Adler’s rent per m2 per
month with estimates provided by CBRE, Adler’s valuer, and Catella, another European property consultant.
Adler Rent Analysis Berlin Leipzig Wilhelmshaven Dulsberg* Wolfsberg

Adler EUR/m²/mth 7.88 6.12 5.67 5.71 6.53
CBRE EUR/m²/mth 9.31 7.11 5.97 6.13 8.41

Catella (Mid-Range) EUR/m²/mth 10.50 7.60 8.80 12.30 9.20
Average EUR/m²/mth 9.91 7.36 7.39 9.22 8.81
Difference -20% -17% -23% -38% -26%
*Hamburg comps
Figure 24 – Adler Rent Analysis
Adler has – at least on this measure – a rental yield 17%-38% below the benchmarks. This is consistent with
Adler’s stated goal of owning properties in B and C class areas.
You can also compare Adler to other listed real estate companies. The following table compares Adler rents to
Grand City and Vonovia (which have higher rent) and to TAG22 and LEG23. TAG and LEG’s portfolio is substantially
low-cost housing. Outside Berlin Adler’s rent looks close to TAG and LEG.
22 https://www.tag-ag.com/en/
23
https://www.leg-wohnen.de/en/corporation
Rent Comparisons Berlin Leipzig Dulsberg Dortmund* Dusseldorf*
TAG EUR/m²/mth 5.84 5.37 5.88 5.57 5.57
LEG EUR/m²/mth 5.65 8.14
Grand City EUR/m²/mth 8.50 5.50 6.50 6.30 6.30
Vonovia EUR/m²/mth 7.97 6.76 8.56 7.35 7.35
Average EUR/m²/mth 7.44 6.41 8.47 6.48 8.68
Average (ex-Catella) 7.44 5.88 6.98 6.22 6.84
Adler EUR/m²/mth 7.88 6.12 5.71 6.25 8.47
*Bundled - Urban NRW
Note: The above locations differ from CBRE and Catella comparisons as there are no immediate competitor data for some areas.
Figure 25 – Adler Rent Analysis vs Peers
Despite a portfolio that resembles the low-cost housing at TAG and LEG, Adler has very low capitalization rates.
Here is a comparison of Adler’s capitalization rates and the listed peer companies.
Cap-Rate Comp Berlin Leipzig Dulsberg Dortmund*

Adler % 2.36% 2.90% 3.74% 3.50%
Grand City (avg) % 4.10% 4.10% 4.10% 4.10%
Vonovia % 2.40% 3.10% 2.80% 3.40%
TAG % 3.50% 4.10% 3.60% 3.70%
LEG % 5.30%
Average % 3.33% 3.77% 3.50% 4.13%
Figure 26 – Viceroy Cap Rate Analysis
Our “Generous” and “Base” scenarios utilize the “Average” and “Grand City rates” illustrated above. Such low
cap rates imply an improved market value despite inferior rental rates and below-average maintenance spend.
Note: in regions where Viceroy were unable to find comparative rates, we used Adler’s reported cap rate.
A comparison to Grand City
The Grand City cap rate comp is fixed for their German residential portfolio. Grand City’s portfolio is very similar
in weight to Adler, both in terms of locations and strategy within those cities; they even share apartment
buildings. We believe Grand City provides the best but generous listed comparison.
Grand City charge a higher rent per m2 than Adler with a cap rate of 4.1%24. Applying a 4.1% capitalization rate
adjustment across Adler’s portfolio is more than fair to accurately value their properties.
Logical Fallacies – Correcting Fatal Flaws

How do Adler derive such low cap rates, hence high valuations, from such properties that appear objectively
inferior? Answer: DCF Valuations.
Anyone who has tried to value a stock with excel knows that DCF valuation is like calibrating the Hubble
Telescope: you turn a fraction of an inch, and you are looking at a different galaxy. We show what “fractions of
an inch” Adler has built into its models to a galaxy far, far, away.
24
Grand City Properties Annual Report 2020
Berlin Rent Freeze – absurd growth projections
The German constitutional court recently overturned a Berlin rent-cap which had only been in place since
January 2020, finding it “unconstitutional”25.
Adler have been treating the news like it’s the discovery of the Schnitzel or the invention of creative accounting.
In fact, the reversal of this rent cap legislation appears to have already been priced into every listed German
REIT and residential investment portfolio with Berlin exposure, reflected in the market’s reaction to the news.
This reversal appears to have been already priced into Adler’s own Berlin portfolio risk. Adler’s Berlin cap rates
increased (thus, relative valuation decreased) in the six-months from 31 Dec 2020 (2.2%) to 30 Jun 2021 (2.36%)
during which time the Berlin rent cap was overturned.
Mark-to-Model – Rent
Adler appears to justify absurd growth expectations purely on a like-for-like basis against CBRE’s average market
rate. It indirectly implies that because it charges below-average rents compared to peers, it can catch up by
increasing rent.
In its Q2 2021 conference call, Co-CEO Beaudemoulin claims Adler have “at least 20% reversionary potential
across [its] portfolio”, with some areas as high as 36%, which will be captured over the next 6 years. This assumes
that a 4%, 18-month pro-rata rent catch-up in Berlin will perpetuate for 6 years across its entire portfolio.
Figure 27 Adler Q2 2021 Earnings Call Transcript
This assumed ex-occupancy growth rate of “at least” 3% and as high as 5% is more than double the assumptions
posted by most competitors. The exception below is LEG Immobilien, which specifically invests in high-growth,
high-yield areas – this is reflected in its residential portfolio cap rate of 5.5%.
Viceroy Rent Growth Comp Q2 2021

Adler - predicted future growth 3% - 5%
Grand City - current 1.40%
Vonovia - current 1.70%
TAG - current 1.60%
LEG - current 3.50%
Figure 28 Rent Growth Comparisons – Viceroy Analysis
Thus lies the problem: Adler appears to mark-to-model its portfolio to CBRE’s, without fundamentally
acknowledging that its portfolio is simply inferior in addition to unrealistic assumptions about rent increases.
25
https://www.theguardian.com/commentisfree/2021/apr/23/berlin-rent-cap-defeated-landlords-empty
Deriving the Discount Model
Here are the “valuation parameters” used by Grand City in their valuations:
Figure 29 Grand City Annual Report 2020
Note that Grand City assume 1.4% growth in rents, Adler – as discussed above – assumes 3%-5%.
Adler has maintenance expense of €6.1/m2 per year which they say is in line with expectations. Grand City derive
€8.7/m2 per year. Adler assumes a discount rate averaging about 4.5% across the portfolio. Grand City uses a
discount rate of 5.1% over their portfolio.
Obviously, it should be harder to get rent increases if you underspend on maintenance – but that is just grist in
this model.
From these differences in assumptions Adler derives a portfolio cap rate of 2.88% versus 4.1% at Grand City – the
portfolios are very similar; Adler and Grand City apartments even share buildings.
In our reassessment of Adler’s portfolio valuation, we compare a fair value derived from Adler against industry
comps (“Generous Case”) and Grand City (“Base Case”), which is the most appropriate comparison. We
determine that Adler’s residential book is substantially overvalued on extreme DCF assumptions.
Adler Group - Residential Portfolio Valuation

Cap Rate Reported Generous Case* Base Case**
Berlin % 2.36% 3.33% 4.10%
Leipzig % 2.90% 3.77% 4.10%
Wilhelmsmshaven % 3.80% 3.80% 4.10%
Dulsberg % 3.74% 3.50% 4.10%
Wolfsberg % 2.91% 2.91% 4.10%
Göttinggen % 2.59% 3.10% 4.10%
Dortmund % 3.50% 4.13% 4.10%
Hannover % 3.26% 3.10% 4.10%
Other % * * 4.10%
Fair Value 8,853,959 7,281,554 6,490,942

Net Operating Income 266,129 266,129 266,129
Expected Write Off (1,572,405) (2,363,017)

* Average district Cap Rates among peers. Where not available, we revert back to Adler's cap rate
**Grand City Cap Rate - representing the most like-for-like comparison
Figure 30 Adler Group Residential Portfolio Valuation – Viceroy Analysis
The LTV effect of these valuations is measured in Section 5 of this report.

4. Development Portfolio – Valuation Flaws
Adler uses a residual value method to value its development pipeline, including its “Inventory”. Some of this
pipeline lacks even development approval, and there is considerable risk in completing these developments.
Figure 31 Adler Q2 2021 Report
What is the Residual Value Method?

The residual value method is used to calculate the value of an incomplete project. This method calculates the
discounted residual value of the development after completion, minus the initial cost of the property, costs to
develop the project, and costs to sell the project.
▪ The completed development is valued via a discounted cash flow method as described in Section 3 above,
and subject to the same flaws.
▪ The costs to finish the project are also discounted to the present also presumably with a low discount rate
in Adler’s case.
▪ The net of these values is the residual value placed on the balance sheet.
A History on Residual Value’s Pitfalls
Residual Valuation method has a checkered history. Enron infamously valued “trading assets” at the present
value of future cash flows no matter how hare-brained or difficult to complete the underlying trade was. For
instance:
When someone had a contract to deliver electricity in India, the value placed on Enron’s balance sheet
was the present value of the expected cash flows minus the costs of the completion of the (maybe very
difficult to complete) project in India.
This was famously described by Jim Chanos in a Business Insider Interview26:
“The energy merchant banks had lobbied the SEC successfully for getting mark-to-model and mark-to-
market accounting for their long-term investing in energy derivatives. To take the present value of all
the future profits that were written into the derivatives were sold as opposed to adjusting it pro-rata
over the life of the contract… [Enron was] celebrating.
…[T]here were a number of academics and accountants who were worried about this practice. That
anytime you could front-load profits you’d really suspect that company of corporate abuse. We had
experience with this in a number of areas in the first subprime fiasco in the mid-90s and then way way
back going back to the annuity issuers – Baldwin United and others – back in the early-80s. They were
selling insurance policies and cooking up all their future assumed income up front.”
That is precisely what this valuation method does: it cooks up assumed future values up-front and places them
on the balance sheet.
26
https://www.businessinsider.com.au/qa-with-jim-chanos-part-iii-the-fall-of-enron-2010-4?r=US&IR=T
The Residual Value method is critically sensitive to assumptions
Like the DCF: the residual value method is based on various subjective, sensitive, and long-dated estimates. All
the difficulties in Adler’s DCF models are repeated here because the residual value of the completed project is
calculated in a DCF.
Unlike the DCF: the residual value assumes that projects can be completed at estimated cost to completion.
Adler has thin cash flows, is levered to the hilt, and cannot complete these projects. Viceroy asserts that it is a
broad misrepresentation to value Adler’s development projects this way. The residual value will not be reached
as the projects will not be completed under Adler.
Numerous case studies can evidence that project completions are not guaranteed: an example is the VauVau
project reversal.
Development Case Study - The VauVau Reversal

This case study examines Adler’s inability to complete projects, even those already pre-sold, and having to
reverse cash receipts to purchasers.
The VauVau developments are a series of high-rise “vertical village” developments Adler acquired through
Consus.
Prior to its consolidation with Adler, Consus announced that it had forward sold VauVau projects to the BVK27
pension fund (Germany’s largest public pension fund) for a “transaction value” of €670m. This was not the cash
consideration transferred, and only partial prepayments were made on the property. The disclosures are – as is
typical with reversed deals – horribly opaque.
Figure 32 Consus Press Release dated 11 January 201828
After years of development delays, this transaction was subsequently reversed in Q2 2021 without mentioning
the purchaser or project. Adler’s IR representative confirmed the project was in fact VauVau but refused to
disclose the identity of the purchasing counterparty, despite being previously disclosed as BVK. They mentioned
the reversal was due the counterparty “changing strategy” and no longer wanting to be invested in the project.
A change of heart is unfortunate, but understandable. However, Adler investor relations advised that deposits
paid by BVK had been refunded, as well as compensation for interest expenses and incidental costs. This is
against the very nature of a “deposit”. Quoting Adler investor relations:
“Buyer had to lay down deposits as developments matured. [Adler] had to pay back these values.”
This has given us pause.
The only valid circumstance that we would understand a deposit being refunded is if the contract was
cancellable under a break clause by the purchaser where the obligations of the developer were not being met.
This appears to have been the case, as the VauVau developments sat idle, and the purchaser was refunded and
compensated.
27https://www.bvkap.de/en
28https://www.bloomberg.com/press-releases/2018-01-11/dgap-news-consus-real-estate-ag-consus-places-projects-with-a-forward-sale-
volume-to-the-bayerische-versorgungskammer-bkv-o
VauVau Very-Current Status
The individual websites of each VauVau location are hilariously outdated. For instance: CologneApart, a VauVau
project, states that occupancy should have begun last month 29. The building is derelict and has an inactive crane
on top of it. If you would like to see the crane, you can do so in the following link to Cologne’s live panoramic
webcam:
https://www.wetter.com/hd-live-webcams/deutschland/cologne-media-park/5977288734b55/
The crane appears below Cologne’s Hohenzollern Bridge, as pictured here on 2 October 2021:
Figure 33 – Capture from Cologne’s live Webcam
This is consistent with other VauVau projects and Consus projects in general that Viceroy have channel checked.
For instance, an article in BZ Berlin details the conflict between apartment purchaser André Gaufer and Adler.
Figure 34 Wohnung gekauft, nix passiert! Kreisel-Opfer reicht Klage ein (translated)
Gaufer was notified by Adler that his apartment completion date was going to be delayed 3 years, and bicycle
lifts, heat and power units, parking spaces and other installations were going to be omitted from his already-
purchased apartment at The Steglitzer Kreisel High-Rise. Mr Gaufer had purchased the apartment from Consus30.
None of these delays and contract disputes have been accompanied by Adler reversing the multi-billion Euro
residual values on their balance sheet.
We have found numerous instances of cash receipts being reversed.
29 http://vertical-village.de/immobilien/koeln
30
https://www.bz-berlin.de/berlin/steglitz-zehlendorf/wohnung-gekauft-nix-passiert-kreisel-opfer-reicht-klage-ein
A VauVau Valuation
Adler has made no attempt – and seems to have no intention – of detailing the cash flows in these transactions.
We note however that upon the reversal of the VauVau sale to BVK, Adler:
▪ booked a €26.1m gain, despite the buyer having walked away,

▪ reversed €54.2m of expenses and capitalized them,
▪ reversed €34.1m of contingent losses against these projects against other income, and
▪ capitalized an unknown amount of compensation liabilities to the former buyer.
This speaks to the quality of Adler’s earnings.
At Adler failing to deliver on a contract and having to pay compensation results in multiple opportunities to mark
up the book and presumably to borrow more money based on marked-up assets.
A wild, incomprehensible disclosure of the VauVau project is included in Adler’s Q2 2021 report, note that both
the buyer and the project are unnamed:
Figures 35 & 36 VauVau Transaction Reversal disclosures in Adler Group Q2 2021 interim report
We raise the following questions to these incomprehensible passages:
What was the cash consideration paid by BVK for the VauVau projects to date?
How much cash consideration was reversed to the purchaser on the cancellation of the transaction?
Can Adler confirm that BVK is the final counterparty for the reversal of the VauVau transaction?

Fair Market Value
As demonstrated, Adler have neither the capital nor the cash required to complete development projects.
Worse, there is a demonstrated inability to finish some of these projects, even those that are forward sold.
Viceroy assert that a market value approach would be more reasonable in assessing the fair value of Adler’s
stalled developments.
In a default-event scenario, which Viceroy believe is likely, we believe Adler’s development and inventory
pipeline will take a hit of at least a €1b hit.
At end of December 2019, before Consus’ consolidation, the work-in-progress was valued at €2,473m, contract
assets at €335m and investment properties at €384m. This was despite Consus’ assets being flipped from related
parties at 17x valuations.
Over the whole book, if we take 30% off the development pipeline, the valuation drops by €1b. Given the
evidence that many Adler projects are idle and they must refund deposits with compensation: this seems
modest.
Here are more realistic estimates reflecting a market value approach to the portfolio, we note that in a default
event our view is that both these assumptions are very generous:
Viceroy Analysis
Development Valuation Adjustments
Assets As Reported Generous (-30%) Base (-50%)
Investment Properties €m 2,033 1,423 1,017
Inventory €m 1,515 1,060 757
Total 3,548 2,484 1,774
Expected Adjustment (1,064) (1,774)
Figure 37 Viceroy Analysis – Development portfolio valuation adjustments

5. Loan-to-Value Analysis – Un-Cooking the Books
Generally intertwined with its methodical siphoning of assets and funds is Adler’s necessity to saddle every asset
with debt. This is limited by the Loan-to-Value (LTV) ratio, a key covenant in substantially all of Adler’s listed
bonds.
Adler’s bond covenants dictate that an event of default occurs if its LTV surpasses 60%. LTV is not an IFRS
measure meaning it can be manipulated and Adler has mastered this manipulation to mislead credit rating
agencies, bond investors, and the wider market as to the health of its balance sheet.
Viceroy’s base-case analysis suggests Adler’s LTV is already at ~87%.

This is purely from an analysis of public information: the tip of the iceberg.
Management have quietly re-defined how they calculated LTV from Q4 2020 to artificially place Adler below the
default event threshold. If it did not change its calculation methodology, Adler would already have triggered a
default event.
Our analysis examines components of Adler’s LTV, including:
▪ Ridiculous portfolio valuations (see Sections 3 & 4 above).

▪ Assumed unrecoverable receivables stemming from uncommercial and/or undisclosed related party
transactions (see Section 1 & 2 above).
Adler’s Covert LTV Calculation Changes
ADO Properties (now Adler Group) changed how it calculated LTV when it acquired Adler Real Estate and Consus.
This change was materially beneficial to Adler: it subsequently refinanced old, expensive debt and issued a large
new tranche of unsecured bonds.
Figures 38 & 39 ADO Properties LTV calculation methods – 2019 vs 2020 respectively
The net debt in the LTV ratio was substantially reduced by including all sorts of questionable assets as cash-
equivalent.
Adler’s new LTV calculation include:
▪ Offsetting total borrowings with contract assets and selected financial assets including dubious purchase
price receivables and loans to undisclosed related parties.
▪ Including financial instruments and investments in associated companies in Gross Asset Value even when
those investments in associated companies resulted from “marking transactions”.
▪ The separate presentation of loan-to-value including and excluding convertible bonds.
Our attempt at estimating Adler’s true loan to value ratio
Here is Adler’s calculation as recreated from the annual report:
Adler LTV Adjustement Estimates As Presented

Corporate bonds, loans & other financial liabilities (7,869,901)
Convertible bonds (309,313)
Cash and cash equivalents 369,874
Financial Receivables 241,000
Trade receivables from sale of real estate investment 272,000
Other financial assets 222,000
Contract assets 133,173
Assets and liabilities classified as held for sale 17,069
Reported Net Financial Liabilities (6,924,098)
Gross asset value
Fair value of properties 12,570,345
Investment in real estate companies 84,716
Reported GAV 12,655,061
LTV inc Convertibles 54.71%

LTV exc Convertibles 52.27%
Figure 40 Viceroy recreation of Adler’s reported LTV
We think that several adjustments need to be made to reflect reality. The reasons for the adjustments are
described in this note.
▪ Fair value of residential properties needs to be adjusted for the ludicrous DCF assumptions described in
Section 3 above. The Viceroy “Generous” case below allows a 3.65% cap rate averaged from listed German
competitors. The Viceroy “Base” case below applies Grand City’s 4.1% cap rate.
▪ The fair value of the development properties should be discounted by a (“Generous”) 30% or a more realistic
still generous “Base” case of 50%.
Realistically we should also use an LTV calculation similar to the 2019 calculation and remove “selected financial
assets”entirely. We have only identified some of these – but they are listed under miscellaneous adjustments
below.

Revised LTV Calculations
Adler LTV Adjustement Estimates As Presented Viceroy Bull Viceroy Base Former Calc
Corporate bonds, loans & other financial liabilities (7,869,901) (7,869,901) (7,869,901) (7,869,901)
Convertible bonds (309,313) (309,313) (309,313) (309,313)
Cash & other discretionary financial assets 1,255,116 1,255,116 1,255,116 369,874
Reported Net Financial Liabilities (6,924,098) (6,924,098) (6,924,098) (7,809,340)
Gross asset value
Fair value of properties 12,570,345 12,570,345 12,570,345 12,570,345
Investment in real estate companies 84,716 84,716 84,716 -
Reported GAV 12,655,061 12,655,061 12,655,061 12,570,345
Viceroy Adjustments
Investment Property
less: Residential Portfolio adjustment (p. 27) (1,572,405) (2,363,017)
less: Development & Inventory Portfolio adjustment (p. 32) (1,064,466) (1,774,110)
Total Portfolio adjustment (2,636,871) (4,137,127)
Gerresheim
less: excess mortgage (55,000) (55,000)
less: Glasmacherviertel loan (74,600) (74,600)
less: partial consideration refund (79,000)
Total Gerresheim impact (129,600) (208,600)
Miscellaneous
less: Taurecon loan (38,100) (38,100)
less: Accentro receivable (60,400) (60,400)
less: Partners Immobillien portfolio receivable (189,000) (189,000)
less: Benson Elliot receivable (32,000) (32,000)
Total miscellaneous impact (319,500) (319,500)
Other Adjustments (449,100) (528,100)

Total adjustments (3,085,971) (4,665,227) -
Viceroy Adjusted GAV N/A 9,569,090 7,989,834 N/A
LTV inc Convertibles 54.71% 72.36% 86.66% 62.13%

LTV exc Convertibles 52.27% 69.13% 82.79% 59.66%
Figure 41 ADO LTV as presented past, present and Viceroy Revision
The adjustments Viceroy have made are a result of our investigations; a more comprehensive third-party
investigation would likely uncover substantially more uncommercial transactions and mismarking of assets. As
has been demonstrated above many of these projects valued at billions of Euros are effectively undeveloped
lots. The company is regularly failing to complete developments and the valuation above still assumes that these
are collectively worth billions of Euros.

Ebner Stolz – Déjà Vu
Adler Real Estate is audited by Ebner Stolz, the same auditor directly implicated in the recent Greensill Bank AG
fiasco. On March 3, 2021, BaFin ordered a moratorium on Greensill Bank 31 following a special forensic audit in
which it was “unable to provide evidence of the existence of receivables in its balance sheet that it had
purchased”.
It is concerning that Ebner Stolz has been responsible for the assessment of Adler Real Estate’s massive
uncollected receivable book.
According to the Financial Times, BaFin also expressed concerns about Ebner Stolz with the newspaper claiming
that “[the] watchdog will report Ebner Stolz to Germany’s audit watchdog Apas…”32.
Figure 42 BaFin orders moratorium on Greensill Bank AG
Kicking Out KPMG

The day following the BaFin’s release about Greensill, Adler Group announced the launch of an audit tender,
meaning KPMG would not be auditing the consolidated group for the year, with Ebner Stolz remaining in charge
of Adler Real Estate.
Figure 43 Adler Group SA: Announcement of the launch of an audit tender
While Viceroy do not know who Adler Group will select, pushing out a Big-4 auditor after an aggressive reverse-
merger should raise eyebrows.
31 https://www.bafin.de/SharedDocs/Veroeffentlichungen/EN/Pressemitteilung/2021/pm_210303_Greensill_en.html
32
https://www.ft.com/content/dd0735f9-3587-4d1c-977b-6554dfc4c019
6. Bond Summary
Adler’s parasitic strategy of acquiring or being acquired by larger companies to flatter its balance sheet has a
drawback: it requires larger and larger targets to offset its indebtedness.
For ease of reference, readers can find a summary of Adler’s listed debt instruments are listed below:
Outstanding
Issuer ISIN Maturity Date Security Type (€000s)
Consus RE AG DE000A2YN7M8 20-Nov-2021 Subordinated Debt 12,600
Consus Real Estate AG DE000A2NBMJ1 01-Dec-2021 Senior Debt 22,000
Adler Real Estate AG XS1731858392 06-Dec-2021 Senior Debt 170,420
Consus RE AG DE000A2YN1U4 18-Dec-2021 Subordinated Debt 13,900
Consus RE AG DE000A254X02 30-Dec-2021 Subordinated Debt 10,200
Consus Real Estate AG DE000A254NN9 22-Jan-2022 Subordinated Debt 59,200
Consus RE AG DE000A254NZ3 05-Feb-2022 Subordinated Debt 33,500
Adler Real Estate AG XS1843441491 17-Apr-2022 Senior Debt 400,000
Adler Group S.A. 30-Sep-2022 Revolving Credit
Adler Group S.A. 30-Sep-2022 Revolving Credit
Consus Real Estate AG DE000A2G9H55 01-Nov-2022 Senior Debt 100,000
Consus Real Estate AG DE000A2G9H97 29-Nov-2022 Senior Debt 119,600
A.D.O. Group Ltd. IL0050502405 01-Jan-2023 Senior Debt 67,359
Consus Real Estate AG DE000A2NBGC8 07-Aug-2023 Senior Debt 50,000
Adler Group S.A. DE000A2RUD79 23-Nov-2023 Senior Debt 165,000
Adler Real Estate AG XS1731858715 06-Feb-2024 Senior Debt 300,000
Adler Group S.A. 15-Mar-2024 Revolving Credit
Adler Group S.A. XS1652965085 26-Jul-2024 Senior Debt 400,000
Consus Real Estate AG DE000A2GSGE2 08-Nov-2024 Senior Debt 150,000
Brack Capital Properties NV IL0011283475 31-Dec-2024 Senior Debt 38,606
A.D.O. Group Ltd. IL0050502652 30-Jun-2025 Senior Debt 104,379
Adler Group S.A. XS2010029663 05-Aug-2025 Senior Debt 400,000
Adler Group S.A. XS2283224231 14-Jan-2026 Senior Debt 700,000
Figure 44 – CapIQ Fixed Income Profile – Adler Group & Subsidiaries
Adler will have significant issues obtaining further finance when lenders realize they have been fooled. This
would immediately result in a liquidity crisis and technical insolvency.
Note: Bonds have similar covenants. <60% LTV, <40% Secured LTC, 1.8:1.0 interest coverage ratio, and standard
reporting requirements.

7. Conclusion
Adler Group as it exists today is a stitched-together and overly indebted entity operated for the benefit of a
kleptocratic network of insiders, and regulators are now watching.
Adler is not an ordinary real estate investor designed to invest in real estate and make a spread over funding
costs. Instead, it is a deliberately complicated mishmash designed to enrich thieves.
Adler uses delusional DCF valuations and derives gains from deceptive “marking transactions” to make
themselves appear creditworthy.
Enormous sums are borrowed, and cash and assets are funneled to friends and associates via opaque related-
party transactions
Due to the complexity, duration, and opacity of this scheme any figures calculated by Viceroy are not
comprehensive: a fully independent third-party audit would be required to ascertain the true financial state of
the Adler Group and its subsidiaries. Our analysis suggests Adler is already substantially in breach of its debt
covenants and that much of its asset values has been fabricated.
Shareholders, regulators, bondholders, and other creditors should move for an investigation into the company
and its financial position, its ties to Cevdet Caner and his inner circle, and the extent and legality of their
influence.
To the shareholders, debtholders, and minority interest holders: we advise immense caution. Do not fall under
the illusion that Adler works for you: Adler works only in the interest of its insiders. You are being robbed.

Annexure 1 – The Inner Circle
Cevdet Caner
Caner is the center of a web of individuals involved with the insider dealing at Adler.
Caner now lives in Monaco and has two prior high-profile failures under his belt:
CLC AG and Level One. Often referred to by Adler as a consultant, Caner appears to
call the shots at Adler despite holding no official position.
Gerda Caner
Wife of Cevdet Caner and sister to Josef Schrattbauer, Gerda often functions as a
stand-in for Caner in various holding corporations. Press reports indicate she has
little, if any, actual control over her holdings33.
Josef Schrattbauer
Brother of Gerda Caner and brother-in-law to Cevdet Caner, Josef serves the same
function as his sister as a cat’s paw for undisclosed related party transactions and
inflating the value of Caner companies.
Richard Bunning
A friend of Gerda Caner, former part-owner of Mezzanine IX Investors and owner
of Meridien Capital Management. Bunning appears to be a former colleague of
Caner from the Level One scheme and former Meridien employees often appear in
key positions at Caner controlled companies.
John D Heikenfeld
An American businessman and former supervisory board member of Adler involved
in Adler since 200534. Former part-owner of Mezzanine IX Investors.
Gunther Walcher
Walcher is the founder of SKIDATA: allegedly a major investor in the Level One
scheme. Despite losses sustained, he appears to trust Caner: former employees of
his investment vehicle Aggregate Holdings say that the company follows Caner’s
orders often acting in party with Adler and Mezzanine IX Investors.
Tomas Machuca
Former CEO of Adler and Brack Capital Properties following its acquisition by Adler.
Machuca was Caner’s former banker during the Level One scheme and has recently
left the business.
Christoph Gröner
Former owner of CG Gruppe, later acquired by Consus, later acquired by Adler.
According to press reports Gröner has close ties to Adler, reinforced by the sale of
CG Gruppe to Aggregate only for them to flip it later.
Teddy Sagi
Israeli billionaire entrepreneur. Teddy Sagi has acted as a middle man for Adler
Group acquisitions: quickly flipping portfolios to Adler for large short term gains.
Sagi was also involved the Brack Coup D’état, buying minority interests presumably
on Adler’s behalf in order to take over the target company.
33 https://www.calcalist.co.il/markets/articles/0,7340,L-3838074,00.html
34
https://www.dgap.de/dgap/News/adhoc/adler-real-estate-adler-real-estate-erhaelt-neuen-mehrheitsaktionaer/?newsID=53550
Annexure 2 – Mezzanine and Aggregate
Mezzanine IX Investors
Mezzanine IX Investors SA is a Luxembourg entity controlled by Caner and his associates: the company is 66%
owned by Caner’s wife Gerda Caner and her brother Josef Schrattbauer.
This is a filing from Caner Privatstiftung which is shareholder in Mezzanine IX Investors.
Figure 45 Caner Privatstiftung filing dated August 25, 2006
Shareholders of Mezzanine IX Investors at its inception were:
Figure 46 Mezzanine IX Investors Incorporation Documents35
• Caner Privatstifung, managed by Cevdet Caner and what appear to be his relations: Nusrettin and Mag.
Hulya Caner36. Caner Privatstiftung’s stake would later be transferred to Bassan SAM, managed by
Gerda Caner.
• Bondi Beteiligugs GmbH, managed by Josef Schrattbauer, brother to Gerda Caner 37.
• Chelmer GmbH, managed by Richard Bunning38, its sole beneficial owner. Bunning is also owner of
Meridien Capital Management39. Several Meridien employees serve in executive positions in Caner-
related entities.
• White Star Investments LLC, managed by Caner associate and former Adler supervisory board member
John D Heikenfeld40.
35 https://gd.lu/rcsl/31fRPR
36 https://www.kompany.de/p/at/203484t
37 https://www.kompany.de/p/de/hrb140545%20berlin%20(charlottenburg)
38 https://www.kompany.de/p/de/hrb140556%20berlin%20(charlottenburg)
39 https://find-and-update.company-information.service.gov.uk/company/09304894/filing-history
40
Austrian Takeover Commission report
Aggregate Holdings
Aggregate Holdings41 is the majority-owned investment vehicle of Gunther Walcher 42, the founder of Skidata
AG.
Viceroy were reliably informed that Walcher was a major investor in Caner’s Level One company. Despite the
eventual collapse of Level One, Walcher and Caner have remained close with Aggregate allegedly carrying out
Caner’s instructions to the letter. The idea that Caner ultimately directs the actions Aggregate has been reported
on in both the German43 and Israeli media44.
The company is Adler’s largest shareholder with holdings of 26.59% as of Q2 2021 and has recently been granted
a non-interest bearing €22.4m loan from Adler subsidiary Consus.
Adler deals overwhelmingly with Aggregate and does so on terms that are incredibly favorable for the latter.
The Adler purchase of Aggregate’s Consus stake at substantial premium is only one such deal.
Using these entities Caner and his associates are often on both sides of many Adler transactions. The goal of
these transactions is to extract wealth from investors and siphon it to Caner’s circle, as well as to optically shore
up Adler’s balance sheet, which is only a house of cards, to perpetuate its schemes.
41 https://www.aggregateholdings.com/en
42 https://www.aggregateholdings.com/media/pages/investors/exchange-offer/2346078420-1610726594/aggregate-offering-
memorandum-final.pdf
43 https://www.wiwo.de/finanzen/immobilien/immobilienkonzern-demire-ag-unklare-verhaeltnisse/12611780.html
44
https://www.calcalist.co.il/markets/articles/0,7340,L-3838074,00.html
Annexure 3 – The Brack Deception
Brack Capital Properties (TASE:BCNV) is a Netherlands-based real estate company listed on the Tel Aviv stock
exchange which owns and develops residential and commercial properties in Germany. Today the company is
majority-owned by Adler but exists as a shell of its former self having been stripped of its prime assets.
Adler gained a controlling stake in the business by buying out Teddy Sagi. They replaced the management team
and cleaned up the rest with a tender offer. This is the same scheme Caner, Sagi, and others ran with Conwert:
an earlier example of Ader’s “Coup d’état Transactions”.
Sagi acquired his 44% stake in May 2017 through his Redzone Empire Holding vehicle for NIS1.1b and flipped it
to Adler in February 2018 for NIS1.4b at a 12.3% premium to the previous closing price. The stake was acquired
from Brack founders Shimon Weintraub and Ronen Peled, allegedly due a disagreement within the company.
Figures 47 & 48 Globes coverage of Sagi’s Brack purchase and sale dated May 23, 2017 and February 18, 201845,46
Investigations by Israeli authorities into Brack’s eventual asset stripping revealed that Adler was interested in
Brack at the time but claimed they did not want to acquire a target with intransigent management.
In April 2018 Adler announced that it had acquired 70% of Brack, with the balance made up of public purchases
and Brack management selling. What followed was a mass management reshuffle putting Adler executives and
Caner allies in key positions at Brack:
• The joint CEOs were replaced by Adler CEO Tomas de Vargas Machuca who continued to serve in both
roles. Viceroy were reliably informed that Machuca was Caner’s banker at Credit Suisse while Caner
was operating Level One.
“According to the investigation of the Israeli entities, the "face" of Adler, CEO Tomas Machuca, who was
previously an investment banker at Credit Suisse, was Caner's personal banker.”
Figure 49 ‫ חברות ישראליות לגרמניה עובר דרך מונאקו‬2‫ – הסיפור מאחורי העברות מיליוני שקלים מ־‬Calcalist and translation
45 https://en.globes.co.il/en/article-teddy-sagi-buys-control-of-brack-capital-1001189828
46
https://en.globes.co.il/en/article-teddy-sagi-selling-brack-interest-for-nis-14b-1001224264
• The CFO was replaced by Thomas Stienlet, a former analyst at Meridien Capital Management. Meridien
is owned and managed by Richard Bunning, manager of one of Mezzanine IX Investments shareholders
and thus Stienlet’s former employer47.
• The appointing of Claus Jorgensen48, also a director and member of the supervisory board at Adler 49
This is when the manipulations started at Brack.
In its Q3 2018 update Brack said it had acquired 4.1% of an unrelated listed German real estate developer for
EUR35m. Strangely the company was never identified, nor did Brack ever justify its purchase despite this being
a material acquisition.
Figure 50 Brack Capital Properties Q3 2018 update
This company was later identified by a consortium of shareholders as Consus Real Estate AG, another Adler
takeover target. Consus was held by Gunther Walcher’s Aggregate Holdings SA who profited greatly from this
purchase by Brack.
Figure 51 Consus Real Estate Prospectus dated July 6, 2018
The identity of Consus was kept under wraps for good reason: the company was as demonstrated above, largely
a construct. At the time Consus’s senior secured bonds traded at 10.5% and it had a mezzanine facility from
Corestate capital accruing interest at more than 20%. A previous Consus IPO had failed with Aggregate almost
alone in taking part.
“Brack's share purchase was made after

Consus' IPO failed with little responsiveness
from existing shareholders. Consus's
publications indicate that Aggregate waived its
right of priority to purchase the shares issued in
favor of the other shareholders, but it appears
that at the end of the day Aggregate was the
only or almost single shareholder to take part
in the IPO”
Figure 52 Correspondence between Brack Capital Properties and Psagot, Harel and Brosh
In combination with the Gerresheim deal, it is easy to see a similar pattern to other Adler acquisitions that do
nothing for shareholders or bondholder, instead enriching Caner’s associates.
47 https://bcp-nv.com/wp-content/uploads/2020/03/BCP-Barnea-report-ENG-2019-18.03.2020-Final.pdf
48 Sometimes spelled “Jorgenson”
49
https://adler-ag.com/en/dt_team/claus-jorgensen/
Annexure 4 – Accentro: Overdue
On October 20, 2017, Adler announced the “sale” of 80% of its Accentro subsidiary to “a partnership advised by
Vestigo Capital Advisors LLP” for €181m50. As usual, the purchase price was not paid up-front. Rather only 20
million was paid (as disclosed in the 2017 Adler Real Estate annual report). Some of the purchase price remains
outstanding.
The immediate acquirer of Accentro was Brookline Real Estate Sarl51. Natig Ganiyev was a director of Brookline
Capital LP, the owner of Brookline Real Estate as well as the managing director of advising entity Vestigo.
Questions on the integrity of the buyers: Vestigo tilting at windmills
Vestigo Capital were simultaneously involved in a Montenegrin scandal involving the sale of a wind farm that
tripled in value over 3 years. Vestigo appeared to be on both sides of the transaction via subsidiary Cifidex; who
purchased the wind farm for €3m and flipping it Malta’s energy provider Enemalta for €10.3m two weeks later52.
It was found that Cifidex had borrowed the original €3m from 17 Black, a Dubai company owned by Yorgen
Fenech.
Fenech was charged with organizing and financing the murder of Maltese journalist Daphne Caruana Galizia
and widespread graft and fraud in Malta 53. Vestigo later disavowed Cifidex despite past statements that they
were the owner.
Vestigo later changed its name to Triangle Equity Partners which was named, along with other directors Metin
Guvener and Gafar Gurbanov, both involved in incorruption investigations involving Azerbaijan’s ruling family54.
Figures 53 & 54 Accentro Annual Report 201955
Figure 55 Diagram of the Accentro transaction and suspicious parties
50 https://www.refire-online.com/companies/adler-stabilises-business-by-selling-accentro-to-uks-vestigo/
51 https://www.spglobal.com/marketintelligence/en/news-insights/trending/eg4v56ug_3_grxtrqyxwsg2
52 https://www.reuters.com/article/uk-malta-daphne-money-trail-exclusive/exclusive-in-daphne-murder-investigation-money-trail-leads-
to-montenegro-venture-idUKKBN23Q1MA?edition-redirect=uk
53 https://www.theguardian.com/world/2019/nov/30/maltese-businessman-charged-with-complicity-to-journalist
54 https://www.occrp.org/en/corruptistan/azerbaijan/2015/12/04/building-on-a-shaky-foundation.html
55
https://www.accentro.ag/en/investor-relations/publications/financial-reports/
A year after the Accentro sale, Adler reported a purchase price receivable of €149.9m but claimed that this
balance was due to no later than June 30, 2019, following a supplemental agreement with the acquirer. Adler
kept kicking the can.
Figure 56 Adler Real Estate Annual Report 2018
In its 2019 annual report Adler received a partial payment of €97.9m and a €2.9m dividend that the buyer would
have been entitled to. There was still a purchase price receivable of EUR56.3m sitting on its balance sheet as
payment “had, however, been postponed.”.
Figure 57 Adler Real Estate Annual Report 2019
As of Q2 2021 Adler still holds €60.4m in purchase price receivables (including interest) on its books relating to
Accentro. The postponement mentioned in its 2019 annual report was again overridden from December 31,
2020 to September 30, 2021.
Figure 58 Adler Real Estate Q2 2021 Intermittent Report
Viceroy believe the balance of this consideration will be a write-off, and the “collateral” is non-recoverable.
Figure 59 ADLER Real Estate AG: Privatisation platform ACCENTRO Real Estate AG sold56
We find it highly unlikely given Adler’s complete disregard for investors capital that a first lien was lodged against
any “collateral” to mitigate the substantial credit risk of the deferred payment terms. Even if Adler recovers this
property, it may likely come back with secured debt and a poison pill, similar to Gerresheim.
We do not know whether Adler has directly or indirectly financed the payments it has supposedly received.
56
https://adler-ag.com/en/2017/10/adler-real-estate-ag-privatisation-platform-accentro-real-estate-ag-sold/
Annexure 5 – Consus: Thoroughly Pillaged
Consus’s Transaction with Gröner (after the deal with ADO was announced)
On May 8, 2020, Consus announced the sale of 17 developments to CEO Christoph Gröner for an unnamed
amount, as well as the acquisition of Gröner’s remaining 25% stake in CG Gruppe (now Consus RE AG) for an
unnamed amount57. Of course, Gröner would not be paying this amount and Consus recognized a purchase price
receivable of EUR339.7m.
In the same reporting period, it was announced that Gröner had resigned from the supervisory board and as
CEO of Consus RE AG. As such he would no longer be a related party.
Figure 60 Consus Q3 2020 Interim Report
In Q2 2020 the Consus stated that if the price had not been paid by October 31, 2020, then the transaction could
be reversed.
Figure 61 Consus Q2 2020 & Q3 2020 Interim Reports, respectively
Note that the company “is determining the final purchase price based on this agreement”. This is for a deal
where the “purchase price” had been finalized. If the purchase price were cash, they would know the number
to the penny. Instead, we can conclude the deal was negotiated in part or in whole as “non-cash consideration”.
By Q3 2020 Consus had yet to receive any payment, instead reporting that the final purchase price was only
reached in the middle of November. Consus reported only EUR183k in sale proceeds for the 9-month period to
Q3 2020; it appears that Gröner had failed to pay anything at all. Gröner for his part collected EUR27.5m in cash
and 24.75m Consus shares for the sale of his stake of Consus RE AG.
Figure 62 Consus Q3 2020
57https://www.consus.ag/consus-real-estate-ag-consus-real-estate-ag-divests-17-development-projects-with-a-gdv-of-eur-2-3-billion-and-
intends-to-fully-acquire-consus-re-gmbh-in-connection-with-a-capital-increase-by-contribu?lang=en
We suspect that this deal may be partially settled for one of the (fictional) pre-existing related party debts of
Consus.
Consus no longer publishes financial statements and as such we do not know whether Gröner has paid for the
properties. Nonetheless we question how Consus could have sold 17 properties to its former CEO and recognized
a receivable and a payment date before backflipping and saying it was “currently determining the final purchase
price” 6 months after the sale.
The presentation with the 2021 Q2 detailed amounts still outstanding from the Gröner Group. See item 2 below.
Figure 63 Extract from Adler Q2 2021 Presentation
Portfolio Sale to Natig Ganiyev

For more details on entities controlled by Natig Ganiyev and their non-payment see Annexure 4 - Accentro
Still unwilling or unable to pay Adler for Accentro, Ganiyev then turned to Consus. On May 20, 2020, Consus
announced the sale of 8 development projects to Partners Immobilien Capital Management for an undisclosed
price58. Viceroy question whether any price was paid at all as there is no disclosure about the acquisition in its
filings for Q2 or Q3 2020.
Figure 64 Consus Real Estate AG divests 8 development projects with a GDV of EUR 2.0 billion59
Natig Ganiyev is listed as the beneficial owner of Partners Immobilien Capital Management Holding Sarl, a
Luxembourg company incorporated the day prior with Natig Ganiyev listed at its beneficial owner.
58 https://www.consus.ag/consus-announces-a-further-material-sale-of-development-projects-resulting-in-additional-significant-
deleveraging?lang=en
59 https://www.consus.ag/consus-real-estate-ag-consus-real-estate-ag-divests-8-development-projects-with-a-gdv-of-eur-2-0-
billion?lang=en
Figure 65 Partners Immobilien Capital Management Holding Sarl RBE profile60
As mentioned above Ganiyev has a history of non-payment for Adler properties and has ties to suspected fraud,
money laundering and murder.
For all intents and purposes, it appears as though Consus gave away 8 development projects (6 of which were
in the top 25 projects as claimed by Consus in its press release) for negligible upfront consideration.
Figure 66 Diagram of the Gröner and Partners Immobilien transactions
Partners Immobilien gets a small mention in Adler Group’s Q2 2021 presentation wherein it is disclosed that
they have yet to pay €189m of the undisclosed sum.
Figure 67 Adler Q2 2021 Investor Presentation
With Adler still awaiting payment from the Accentro deal conducted almost 4 years ago, we doubt whether
Consus will be seeing any consideration anytime soon.
60
Visit https://www.lbr.lu/mjrcs-rbe/jsp and search for B44274
Annexure 6 – Conwert: Denied
Conwert Immobilien Invest SE (Conwert) is an Austrian residential real estate developer with most of its portfolio
in Germany. This is the first apparent example of Caner’s tricks at Adler and a decent introduction to Caner’s
inner circle.
Conwert was the target of a takeover bid from Adler Real Estate around autumn 2015 which drew the scrutiny
of the Austrian Takeover Commission and is now owned by Vonovia SE. We believe this regulatory scrutiny is
what motivated Caner to shield his involvement more carefully with Adler in future endeavours.
Summary of Austrian Takeover Commission Report

The report by the Commission61 details Caner’s control of Adler including his brokering of deals, transaction
structuring, attendance of meetings, suggestions of Director appointments and setting of schedules. The view
of the Commission was that Adler was effectively controlled by Caner, despite his claims that he was a
“consultant”. The report goes into detail a about Caner’s network of associates involved in the Conwert
transaction, some of which appear in later Adler transactions.
In a ruling dated November 30, 2016, the Commission formally held that Adler Real Estate, its subsidiaries
MountainPeak and WESTGRUND, Mr. Cevdet Caner and Petrus Advisers LLP had acted in concert with respect
to Conwert: acquiring a controlling stake in Conwert on September 29, 2015, in the context of a potential
transaction between Adler Real Estate and Conwert. Consequently, the Commission ruled the parties had
wrongly failed to make a mandatory takeover offer to the remaining shareholders of Conwert.
Adler Real Estate appealed this ruling to the Austrian Supreme Court on December 14, 2016. However, in a
decision communicated on April 10, 2017, the Supreme Court upheld the ruling of the Commission. While its
ruling was ultimately ruled against by the European Court of Justice, the report details Caner’s complete control
over Adler.
The Scheme
Israeli entrepreneur and Caner associate Teddy Sagi purchased 24.79% of Conwert in May 2015 for an
undisclosed amount62 (likely a discount to the €228m market price). Three months later in August 2015, Sagi
sold his stake to Adler Real Estate for EUR285m, likely netting a healthy profit63 and valuing Conwert at €1.49b.
While this stake was significant, the Commission established that Caner associates acted in concert with Adler
Real Estate in purchasing innocuous amounts of Conwert stock in anticipation of a transaction between Adler
Real Estate and Conwert.
While some identities of individuals and businesses in the report have been anonymized, it is easy to deduce
their identities with information available today and within the report. These include:
• Caner’s wife Gerda Caner (nee Schratbauer), who controls a stake in Monaco company Bassan SAM, a
Mezzanine IX Investors SA shareholder.
• Brother-in-law Josef Schratbauer owner of Bondi Beteiligungs GmbH, a Mezzanine IX Investors SA
shareholder.
• Longtime associate Wolfgang Hahn who worked with Caner at Green Bridge Capital, the fund accused
of siphoning funds from Level One. Hahn appears as a minor shareholder of Bassan SAM and owner
of Duvorest Limited, a Cyprus company with holdings in Conwert.
• Richard Bunning, as a friend of Gerda Caner and owner of Meridien Capital Management64. Bunning is
the owner of Chelmer GmbH, a Mezzanine IX Investors SA shareholder.
61 https://www.takeover.at/uploads/u/pxe/A2_Entscheidungen/Bescheide/GZ_2016-1-2-317_Conwert_-_22.11.2016.pdf
62 https://www.marketscreener.com/quote/stock/CONWERT-IMMOBILIEN-INVEST-6496202/news/Conwert-Immobilien-Invest-SE-nbsp-
MountainPeak-Trading-completes-acquisition-of-shares-in-Conwert-20386307/
63 https://www.marketscreener.com/quote/stock/CONWERT-IMMOBILIEN-INVEST-6496202/news/Conwert-Immobilien-Invest-SE-nbsp-
Change-in-share-of-voting-rights-ADLER-Real-Estate-AG-and-Longwa-20927773/
64
https://find-and-update.company-information.service.gov.uk/company/09304894
• John D Heikenfeld, a former Adler supervisory board member and a Caner associate since 2012.
Heikenfeld is the manager of White Star Investments LLC65,66, a Mezzanine IX Investors SA
shareholder.
Below is an organizational chart as well as a table of aliases and the corresponding identities.
Figure 68 Austrian Takeover Commission chart and alias table
We believe Adler attempted to do to Conwert what it would later do at ADO: flip the board, enrich insiders, and
saddle its assets with debt. It is no surprise that this same cabal appears in numerous Adler acquisition activities.
The acquisition bears the Caner trademarks: apparently unrelated entities quietly purchase enough stakes to
collectively own a majority, then act as one to push through an acquisition of a better capitalized company.
Conwert Objections
Ultimately the acquisition fell through due to discrepancies in the valuation of Adler’s assets which Conwert
considered too high, concerns that consolidation would negatively impact their credit rating, and objections to
a replacement of the board of directors with Adler personnel.
As detailed in the report:
“The parties had different price expectations for carrying out the transaction, which were due to differences
of opinion in the valuation of Adler's real estate”
“From the point of view of Conwert, the transaction could not be completed under the given business
parameters”
65 Visit https://mycpa.cpa.state.tx.us/coa/ and search for “White Star Investments”

66
Visit https://ecorp.sos.ga.gov/BusinessSearch and search for control number “0118818”
“The reason was the fear that if Conwert were fully consolidated by Adler, the investment grade rating (loan-
to-value ratio, “LTV”) of Conwert could be lost at an investment rating agency based on a "Look-Through
Principle"”
“The starting point of the discussion was the suggestion that Adler should have two out of five seats in the
administrative mode of Conwert and should also provide the chairman.”
“The proposal was rejected by Conwert: In the opinion of Conwert, two seats were too many for a shareholder
with Adler's stake; the chairmanship was rejected for reasons of “corporate governance””
“Adler then submitted the compromise proposal that Conwert would accept a single Adler board member,
who would also be elected chairman”
“This proposal was also rejected by Conwert because it was of the opinion that the chairman of the supervisory
board of a competing company could not also be the chairman of the board of directors of Conwert”
Figures 69, 70 & 71 Austrian Takeover Commission Adler Investigation & Translation
Ultimately it appears Conwert were correct: Viceroy have found significant issues in Adler’s accounts which
present a healthier balance sheet than actually exists.
Adler agreed to sell its Conwert stake to Vonovia in September 2016 for 74 Vonovia shares per 149 Conwert
shares (€17.58 per Conwert share)67 valuing the business at €3.2b.
67
https://www.reuters.com/article/us-conwert-m-a-vonovia-idUSKCN11B0LV
Annexure 7 – CLC AG
Cedvet Caner’s first foray in the stock market was Call & Logistik Center GesmbH (CLC), a German-listed
telemarketing center.
Like his other spectacular failures, CLC’s game plan was effectively to overleverage itself to grow, buy larger
competitors to “fix” balance sheet, borrow even more money, and repeat until no larger takeover targets
existed at which point the scheme collapsed. While this was happening, the company shuffled cash to directors
through “loans” which appear to have never been repaid.
Caner originally founded CLC in 1998, which became the first private directory assistance line in Austria around
2000.
Without skipping a beat, and with zero time or money under its belt, CLC acquired the much larger cash-burning
call center DMB Marketing Beratung GmbH in late 200068 with relatively large amounts of debt.
Turnover from Directory Services jumped from €1m to €3.9m from 2000 to 2001 from this transaction.
Figure 72 CLC AG Annual Report 2001
When CLC IPO’d in June 2001 to free up capital from the horrible DMB acquisition, it was burning cash and
paying heavy interest.
Instead of paying down debt and establishing a working capital buffer with the IPO proceeds, CLC purchased the
much larger Camelot Group in Germany. Camelot also burned cash, had terrible unit economics, but a relatively
clean balance sheet. At this stage, CLC was among the largest German-speaking customer care and directory
businesses.
CLC continued to raise debt and issue equity against Camelot’s balance sheet until it too was completely
underwater.
With the loss of one customer who accounted for over 30% of the group’s sales, CLC collapsed – it was the
straw that broke the Camel(ot)’s back.
Caner sold ALL of his shares (21.3%, as at EOY 2001, but less at time of resignation as he appeared not to
participate in capital offerings) and resigned, leaving the bag-holders to come up with a restructuring solution
that inevitably failed.
All the while, Caner appears to have taken HUGE loans from the insolvent business.
This is the first instance of the cycle of acquiring a better capitalized and often larger competitor to take on
excessive debt before collapsing under its weight.
68
https://apps.derstandard.at/privacywall/story/642298/callcenter-betreiber-clc-uebernimmt-dmb-marketing-ganz
Annexure 8 – Level One
Following the collapse of CLC Caner set his eyes on real estate with the company Level One.
The premise was simple: purchase low-cost prefabricated housing in Germany and securitize the debt. Credit
Suisse was the first lender to the party, joined later by UBS and Bear Stearns.
By the end of 2007 Level One had 28,000 apartments, various other properties, and land in its portfolio as well
as €1.1b in debt. Caner believes that at the time he was Credit Suisse’s largest single customer outside the US.
At the end of 2007, Caners Holding had 28,000

apartments in its portfolio, as well as various
commercial properties and fallow land - and over
1.1 billion euros in debt on the books. Credit Suisse
alone was involved with over 800 million. “I was
the bank's largest single customer outside of the
US,” Caner says. And he wanted to stay that way in
2008 and keep growing.
Figure 73 Das Ende einer Heuschrecke – Der Spiegel 25/2009 and translation69
Viceroy were reliably informed that Tomas de Vargas Machuca, then-future CEO of Adler and later Brack was
Caner’s personal broker at Credit Suisse. Gunther Walcher is also alleged to have been a major investor in Level
One.
Level One planned to IPO in 2007 but the tide turned as high-risk credit dried up in the wake of the financial
crisis. Ultimately it was a €109m mezzanine loan with 20% interest from Credit Suisse dubbed “Piper” that
signaled the end for Level One. The company was unable to refinance it and the loan itself had been sold by
Credit Suisse to several vulture funds.
Level One was placed into receivership in August 2008 and was declared insolvent in September 2008. Credit
Suisse was in for €300m, with the majority of the €1.3b loan from Credit Suisse to Level One already securitized70.
Apparently, no-one thought to ask whether a 35-year-old Caner with one failed business under his belt was a
“risky prospect”.
For his part Caner has always maintained that he was a victim of shady deals by Credit Suisse and an
“embarrassing takeover attempt” and claims the outflows to companies controlled by him were part of the
official structure of the company71.
Level One went down in the history books as Germany’s largest real estate collapse since Jurgen Schneider’s
smash-and-grab style scheme fell apart in 1994.
69 https://magazin.spiegel.de/EpubDelivery/spiegel/pdf/65717393
70 https://www.trend.at/wirtschaft/business/plattenbau-pleitier-linzer-immo-insolvenz-deutschlands-233543
71
https://www.immobilien-zeitung.de/79385/level-one-ist-pleite-und-keiner-wills-gewesen-sein
Annexure 9 - Deutscher Bundestag Member Letter to BaFin
DOWNLOAD LINK: https://dserver.bundestag.de/btd/19/323/1932347.pdf

Translated – Bundestag Letter to BaFin

Annexure 10 – Letters from Adler and Aggregate
Letter from Adler received October 5, 2021, at 11:06 AM CET

Letter from Aggregate’s lawyers received October 5, 2021, at 12:52 PM CET


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Adler Group – Bond Villains

Adler engages in three broad types of transactions:

“Looting Transactions” are where:

Either way: value is transferred out at shareholders’ expenses.

“Coup D’état Transactions” are where:

Viceroy Research Group 1 viceroyresearch.org

Adler LTV Adjustement Estimates As Presented Viceroy Bull Viceroy Base

LTV inc Convertibles 54.71% 72.36% 86.66%

Viceroy’s analysis is based on publicly available information.

Viceroy Research Group 2 viceroyresearch.org

ADO Properties – “Coup d’état Transaction”

Consus – “Looting Transaction”

Viceroy Research Group 3 viceroyresearch.org

The Grim Conclusion

Viceroy Research Group 4 viceroyresearch.org

Viceroy Research Group 5 viceroyresearch.org

Viceroy Research Group 6 viceroyresearch.org

You can contact the Viceroy team via email on viceroy@viceroyresearch.com.

Important Disclaimer – Please read before continuing

Thank you to several journalists

Viceroy Research Group 7 viceroyresearch.org

Show me the Cronies

Show me the Related Parties

1. “Marking Transaction”: Gerresheim sale and reversal

Brack Capital Properties: Watch this hand… – Annexure 3

Natig Ganiyev: Overdue – Annexures 4 & 5

Consus: Thoroughly Pillaged – Annexure 5

Conwert: Denied – Annexure 6

Viceroy Research Group 10 viceroyresearch.org

Gerresheim Marking Analysis

Brack Sell 75% of Gerresheim to Schrattbauer

Viceroy Research Group 11 viceroyresearch.org

Figures 5 Brack Annual Report FY 20177

Figure 7 Diagram of the Gerresheim transaction

6 https://bcp-nv.com/wp-content/uploads/2019/05/BCP-DirI think ectors-report-Q3-EN-2019_12.11.19.ODF.pdf

Gerresheim Marking Analysis

The Secured Loan - €145m

Gerresheim Theft Analysis

Figures 11 & 12 Adler Group Q2 2021 Report extracts

Note that there are €249m in liabilities, comprised of

1. The €145m mortgage from an unnamed lender.

Viceroy Research Group 15 viceroyresearch.org

Figures 14 & 15 Adler Group Q2 2021 Report extracts

Gerresheim – KEY TAKEAWAYS

More on this to come in Part 4. – Development Portfolio Valuation.

Viceroy Research Group 16 viceroyresearch.org

Overview of ADO Properties transaction

Figure 17 Diagram of the Adler/ADO Group/ADO Properties transaction

Figure 18 Extract from Consus Press Release – December 15, 201917

Figure 19 Extract from Consus Press Release – December 15, 2019

Figure 20 Man nennt ihn den Bundestrainer – Wirtschaftswoche and translation21

Other financing of Consus

Figure 22 Consus Annual Report 2018

Viceroy Research Group 21 viceroyresearch.org

▪ The sale of 17 developments to former Consus CEO, Christoph Gröner

Full consideration of these transactions has not been paid.

Viceroy Research Group 22 viceroyresearch.org

How Adler’s property is valued

Adler’s residential investment property portfolio is valued extremely aggressively.

Adler Group - Residential Portfolio Valuation