Good morning. Welcome to the Catella Q4 2022 Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Christoffer Abramson. Please go ahead.
Thank you. Good morning, everyone, and welcome to Catella's Q4 and Year-End Report. In addition to myself, Christoffer Abramson, with me today are Mattias Brodin, our Chief Financial Officer, and Michel Fischier, Head of Investor Relations and Communications. We'll try to present the results for about half an hour, and then we'll open up for Q&A as usual. Let's start the presentation on page 3 with a brief overview of Catella. Although most of you are likely familiar with our strategy and operations by now. Catella operates in three property-focused business areas: Investment Management, Principal Investments, and Corporate Finance. We manage over SEK 140 billion in our Pan-European Investment Management platform.
About 75% of the assets under management, AUM, are managed in property funds, and the other part in a significant number of asset management mandates across Europe. Principal Investments is where we invest our own equity into a broad and diversified portfolio of European investment projects together with partners. Corporate Finance is our real estate advisory and brokerage arm with leading positions in large European markets. Corporate Finance is also an important internal advisor to our other business areas, Investment Management and Principal Investments. With that brief introduction, let's move to page 4 for a summary of the year. 2022 in brief. I'm really excited to report on a very strong and transformative 2022 for Catella. Since our decision to focus our operations on three property segments, we've continued to deliver on our set goals and advance our position on prioritized markets.
Our progress is a result of a dedicated strategy and work to strengthen our three property-focused business areas in 13 European countries and with investments in even more. It is built on the belief that qualified advice in our Corporate Finance platform specifically and Investment Management in all our forms and our own investments are based on values that are created over time jointly with our partners and clients and therefore require a long-term perspective from a societal, environmental, and investor perspective. Over the last three years, with that strategy in mind, assets under management has grown by 25 billion, and revenue is up over 40% to SEK 2.6 billion. During the year, we also entered two new markets.
In Poland, we acquired a majority share in WPP, which is now called Catella Poland, which opens up opportunities for AUM growth in another major European market with high potential and strong demographic trends. This is also a key market for opportunistic investment strategies for Principal Investments. Through our U.K. company, Catella APAM, we also enter the Irish market, where we now offer our products and services, initially, primarily in the residential segments. A part of this focus and strategy, we also decided to discontinue our Corporate Finance operations in Germany and the Baltics and are now wholeheartedly focusing on strengthening Corporate Finance in our remaining five markets with a higher underlying profitability level now after shedding prior annual losses that have been weighing that segment down.
In addition to these structural changes and movements in markets, we also advanced quite a lot, I think, and proudly so, in the area of sustainability. For example, we launched our second Article 9 dark green fund with the long-term ambition to develop 100 energy-positive residential towers around Europe. We also decided on our long-term ESG strategy and sustainability goals at Group level, a very significant step forward for us. This will, you know, guide everything that we do from now on, from product development to corporate governance. As mentioned, 2022 was a record year for Catella. We have increased earnings per share substantially over the last few years, even through a challenging market and through a significant business transformation.
The Board proposes a dividend increase of 20%, to 120 SEK per share. In a turbulent market, and we've reinforced this several times now, liquidity is key. We have strengthened our position further in 2022, and we stand very strong going into the early parts of 2023. While our dividend policy is to distribute 50% of our net profits over time, we feel that a strong 20% dividend increase on the back of a strong increase also last year, coupled with retaining a very strong liquidity for both opportunistic investments and platform growth, it really is the best balance for shareholders in 2023. Additionally, our funds also have material liquidity with approximately an additional SEK 10 billion in committed capital.
This provides us excellent flexibility and dry powder to invest in long-term value creation and even more sustainable assets as market continue to reprice in the early parts at least of 2023. Let's move to page 5 for the key operational highlights of the fourth quarter. As just mentioned, we continue to build liquidity, and we have no near-term refinancing needs. Simultaneously, we're reviewing a number of growth opportunities, both in Principal Investments and through potential strategic platform acquisitions. We've also decided on four key priorities areas to take our next steps on our profitable growth journeys over several years. This is a long-term strategic efforts, and I will discuss these shortly. Let's go segment by segment and start with Investment Management.
Compared to the previous quarter, assets under management decreased slightly. This is really explained by a very large strategic sale of 34 residential properties in Germany and the Netherlands. The reason for the sale was to rationalize the fund's property holdings and to release liquidity for new investments with an even improved sustainability profile. I'll elaborate a bit further on the strategic sale and rationale later on in the presentation. Interest for our second Article 9 fund, Catella Leasis, remains strong. We're very, very pleased to announce that earlier this week, larger institutional investors committed close to SEK 1 billion to the fund.
All in all, we currently have SEK 10 billion in capital commitments to our funds, in addition to some excess liquidity, following these sales, providing excellent investment flexibility in a, frankly, a rapidly changing market, with continued repricing of assets, which gives us a great chance to place significant capital into the market at a new lower entry point to build value through the next market cycle. In Principal Investments, we had no significant new investments or divestments made during the quarter. The current market conditions are pushing our divestments slightly into the future. In this environment, we consider it to our advantage to be well-capitalized and have the ability to wait for a more stabilized market rather than forced sale or aggressive refinancing.
In the longer term, we're convinced of the attractiveness of our projects, and we will exit them when the timing is right. Our pipeline is mainly progressing according to plan, and we're continuing to develop ongoing projects, albeit at a slightly slower pace, which we chose to do during 2022, and that's starting to say pay off as we, for the first time in a while, see signs of materially decreasing construction costs and real availability of resources in the market, meaning that at least some of the increasing financing costs are being offset. Our strong balance sheet also allows us to review and invest in a number of more optimistic co-investment opportunities across Europe, where we've seen increased interest from several capital partners.
We aim to really increase the number from the couple of recently launched Pan-European strategies, which really is about aggregation and repositioning of assets. Finally, Corporate Finance. You know, the transaction market continues to be slower than usual in the current market and the transactions that are occurring are generally large restructuring of portfolios which are a little bit binary. You either have a really good transaction quarter or somewhat slower if you didn't get that one big hit. Before the expectations of buyers and sellers reset and align, we assess that the transaction market will likely continue to be somewhat in a wait-and-see mode.
Although there's a little bit more activity and talk around town, I would say, these days after the Christmas break. The diversity of our offering has been a strength in the second half of 2022 and into the fourth quarter. One of our main revenue drivers in Corporate Finance in our largest markets, primarily, you know, our two largest markets are Sweden and France, have struggled somewhat, at least compared to a record year last year. If we look at our portfolio, for example, Spain still delivered a record year as that market continued to be strong a little bit longer than the northern part of Europe. The demand for valuation services has rapidly increased given the repricing across asset classes.
There's a large need for that, and we have some really strong valuation platforms with profitability. On page 6, you have the summary of the group's consolidated results. Again, I'm pleased to present yet another strong quarter and dare I say, a fantastic year. During the quarter, our revenue grew by over SEK 25 million to nearly SEK 660 million. Operating profit decreased somewhat, mainly as an effect of the slow transaction market impacting Corporate Finance profitability. We should remember Q4 in 2021 was an all-time high for us on the Corporate Finance side. All the underlying profitability metrics across the other segments improved.
In Q4, you know, we still think, you know, if you take the drop in Corporate Finance a little bit out of that, we grew quite dramatically into Q4 anyway. Operating margins ended at a very solid 18%, still grew assets under management, and more importantly, full year operating margin was at 25%, while we're still growing assets significantly. Investment management delivered a substantial AUM growth of SEK 18 billion over the last twelve months. In Q4, as we said, it was largely unchanged due to the strategic divestment of the residential assets in Germany and the Netherlands. Profit margin was 26% of the quarter in that segment and 32% over the last twelve months.
Driven both by underlying AUM growth, increasing our fixed fee revenue at, you know, moderately increase in fixed costs and substantial variable revenues as well. In Principal Investments, as I said, no divestments were carried out in the quarter, but the business areas have contributed substantially to operating profits during the last 12 months, and it is a long-term business that we have to look at as earnings over not really by quarter, but over a slightly longer period. Our focus now is ahead, continue to develop the current pipeline of projects and to pursue co-investments aimed at creating new partnerships and revenue streams, and really on exploring opportunistic ideas as the market opens up again at new price points. As I said, the slower transaction market impacts revenue and Corporate Finance.
We still had an EBIT of SEK 11 million, a lower of course to last year's record quarter. We enter 2023 without the burden of the loss-making historical platforms that we exited, and that lifts the baseline quite substantially for Corporate Finance. I wanted to move to page 7 and spend a little bit of time on our divestment of the residential performance in Germany and Netherlands and explain the rationale and what we're doing with our portfolio. We obviously continuously apply an active portfolio management approach in our funds and repeatedly and constantly review our assets from a hold and sell perspective.
Importantly to note, this is done based on double materiality criteria, which is really important because we look at them both from a financial return perspective, but also from a sustainability perspective. This is gonna increase over time, and the quality and the strength of our portfolio comes from both the financial return, but also from the sustainability profile of our assets. The focus on this is only gonna increase. As part of this, continuous asset management process, we identified certain assets acquired about five-10 years ago in two of our older funds, Catella European Residential and Catella Wohnen Europa. Our analysis concluded that these assets no longer suited our current funds or future fund investment strategies.
That was really partly due to ESG standards, and we therefore decided to sell a large portfolio of these residential assets. I'd say, you know, with intelligent analysis and some luck, the decision was made at a point in time where our research pointed towards both increasing interest rates, which would dampen property pricing, and also when conversion costs to upgrade and improve sustainability, and particularly environmental requirements for these assets started to increase. The timing of the sale agreement was at least partly ahead of the market turmoil that we did anticipate. It's still a great portfolio of assets, but, you know, that divestment has strengthened the liquidity in our funds and provides the financial flexibility now to upgrade the portfolio with new investments.
We're essentially recycling this capital. There will be some dividends out to investors, of course, a lot of the capital is being recycled into new investments with an improved sustainability and return profile, just as the market is repricing, which we consider a very good opportunity. In addition, I think it's important for our investors as they analyze our portfolio, to understand that even though our AUM decreases materially in the short term, the actual fee base, which is net asset value, only reduces somewhat. The fixed fee impact going forward is limited, and we're instead fully focused on recycling this capital into new and more sustainable assets. I think it was a great transaction, great upgrade of the portfolio underway, and we'll talk more about this during 2023.
Let's move to page 8 and discuss our key strategic priorities going forward. As we mentioned, we are on a multi-year journey. The market is in an interesting point of the cycle, where yields are up, interest rates are up, rents are also increasing. There's a lot of dynamic trends happening in the market, and we are ready to move forward in this new environment. We have four main prioritized areas that we will focus on in the coming years. We will continue to increase the offering of products with a clear sustainability impact. I want to stress that very much. Catella offers two dark green Article 9 funds today and several Article 8 funds. We also have other funds and mandates focused on enhancement and repositioning of properties.
Looking ahead, we will develop this offering further. We do this in part because it's the right thing to do, as a company, and because we have the competencies and the market positions across Europe to meet the substantial demand we see from investors. This is a huge developing market with tremendous repositioning and enhancement and upgrade needs. We believe the demand will only increase. We are both hiring and allocating capital to these types of products. We will also broaden and adapt our product offerings for various stages of the economic cycle. It's been a very long, almost uninterrupted run of decreasing yields and increasing property values.
That time is, at least for now, over, and we're now in basically what we say is the time for asset management, the time for active Investment Management, which plays exactly to our strengths. In the immediate future, it will be centered around launching strategies, mandates, and services for the current uncertain period we're currently experiencing. This might include mandates for repositioning underperforming assets across Europe or focus on debt and capital services, which really is gonna become, I think even more pressing needs in the market, through 2023 and 2024.
In parallel with this, we are working with all our businesses, preparing our next generation of funds, and our next generation of investments, and our next generation of mandates across Europe based on a detailed analysis and research of the outlook, how we look at the future. Basically, we call it conviction investing ideas that we bring to our clients and new clients that will be ready to launch from 2023 onwards and really targeting the large global institutional investors, and how we see the real estate markets progressing in the next coming years. We will focus a lot on continuing to strengthen our synergies between all our companies and develop pan-European investment strategies.
That's one of the unique aspects of Catella is our ability to operate very flexibly and pretty much across all of Europe. We have a strong position with a significant presence on the European market, which is complemented by long, strong local connections and knowledge from all our segments. This is where the synergies become so important. We will continue to build on our unique position and offer pan-European investment strategies and mandates. This is really an area where we can both offer investors attractive returns and where our local expertise and our basically group co-investment capital are real differentiators and something that very few of our competitors can offer in the same scale and breadth. As a fourth prioritized area, we...
and I'll get back to this over and over, we will capitalize on our financial position, to generate new business and expand into new strategic growth markets. We are well-equipped to undertake investment in both companies and assets that we consider a close fit with Catella, and that will contribute to our growth and profitability. The current market conditions and asset repricing, they increase the potential for opportunistic investments. We think we're in a great point of the future cycle. We selectively analyze acquisition opportunities in business areas and markets where we wanna develop, with the right strategic and geographical fit and of course, our direct investments with Principal Investments, all of which is supported by our strong liquidity position. If we move on to page 10, we'll discuss Investment Management in a little bit more detail.
Again, we show same graph. We're very proud of it and we continue to deliver on this. Since the inception of Investment Management in 2015, we've delivered a strong average annual growth rate of 25%. Year-on-year assets under management grew by SEK 18 billion in 2022. Of the AUM growth over the last 12 months, a large portion stems from inflows to our modern residential funds, with particular interest in sustainable assets. In Q4, the inflows were evenly distributed between residential funds and commercial funds, which I think is a really good trend that our commercial funds are gaining momentum. Of course, the material outflows were mainly related to the divestment of the 34 residential properties in Germany and Netherlands, which I discussed further.
We have, of course, had some currency tailwinds in 2022. We are very, very proud of the underlying continued growth in what we consider a pretty challenging market with enhanced sustainability offering and again, significant investable capital to continue this growth. On page 11, I wanna get a little bit deeper into how the profitability of Investment Management looks. The growth continues. The AUM growth drives increased fixed fee income. This is our key underlying Investment Management metric and the main underlying profit driver for Catella. As can be seen in the graph, fixed fees have increased by 55% since 2020. That's a dramatic increase, the fixed fees as AUMs growth are stable and not fully, but very secure, at least in the short and medium term.
It is important to know that our fixed fee income now materially exceeds our non-variable operating expenses. Even in a very, very low transaction market, which we have been in the last few months, and without performance fees, which we have had in 2022, but still looking forward, our Investment Management business generates far north of SEK 200 million operating profit a year, even basically without transacting. Variable fees such as acquisition and disposal fees and the kind of choppy and large performance fees are substantial in Q4, and this is primarily driven by the large residential divestment in Germany and Netherlands and a couple of other transactions. Again, fixed earnings continue to be the real underlying growth driver here.
Another point I'd like to make is that as of our asset management business, even though revenue looks flat year-over-year, core revenue did increase by SEK 16 million. We moved Catella Logistic Europe and Catella Project Management into Principal Investments because they are development platforms. They fit better in that segment in early 2022. On a like-for-like basis, asset management grew in 2022, and we really believe that this is gonna be one of the main growth drivers in 2023 and beyond. You know, one main profit driver in Q4 was the successful sale of the final asset of a logistic and light industrial portfolio of 29 assets, which our Finnish team successfully managed since 2016.
Over that long period, they created significant value for the investors with an IRR of 16%. As I pointed out earlier, our broad offer in asset management provides critical competencies in these turbulent markets to reposition and to develop assets. This is a crucial part of Investment Management. That I would say balances our diversified growth in economic downturns or turbulent markets, transaction markets are somewhat slower, and complex asset management has the ability to continue to grow. Investment Management continues to be the main growth engine, and we continue to successfully raise new capital, even though it's been a bit slower in the last couple of quarters, and launch new sustainability-focused funds and asset management mandates.
In the slower market, even though, as I said, we just raised a SEK 1 billion into our dark green fund. In this slower market, it's important that we have reached now the scale and structure that even during the slower transaction quarters, we will continue to deliver a very, very strong, solid underlying profitability. Page 13 has the overview for Principal Investments. We continue to invest in a diversified portfolio of projects in different asset classes. The portfolio now consists of nine active projects, as well as some projects in pre-development phases in six European countries, plus a collection of smaller co-investments that are also on track to meet our return criteria.
More importantly, in these various mandates, they create new partnerships with investors, and they generate new revenue streams through asset management mandates and other ways to exit these transactions. I think it's a great diversification of our earnings in the segments that will only increase over time. During the fourth quarter, no divestments were made, but our expectation is that our far advanced developments, such as Kaktus Towers in Copenhagen and our two remaining logistic development projects in Sweden, will close now during the first half of 2023. In Kaktus, we're making good progress with commercial leases, and the residential part has been fully let since September, and we have a positive running yield on that asset.
The first phase of our Ferskt development in Düsseldorf began leasing in Q4 with great leasing progress so far and rents well ahead of expectations with the full phase I expected to complete about 250 apartments in Q3 of this year. To date, our completed transactions have generated an IRR, an average IRR of over 50%. Of course, well ahead of our long-term target of 20%. While no one should expect 50% to be the benchmark going forward, we continue to invest only in very attractive opportunistic projects based on sound macro and micro analysis with very prudent assumptions.
As I mentioned earlier, we took the time in 2022 to slow this development down a little bit in a very, very difficult and expensive construction market, and we now see that opening up, and we're looking at all our projects to possibly go back into a slightly faster mode in some of these phases. Principal Investment earnings will always be somewhat volatile between quarters, but we focus on the SEK 184 million of operating profits during the last 12 months and the strong pipeline going forward with our liquidity ready for the right entry points. Of course, we and the rest of the market continues to assess the balance between increasing rents and rising yields and falling construction costs versus higher financing costs.
It's a complex environment right now, but that's gonna provide a lot of opportunities. Having a strong balance sheet in this environment continues to be crucial as we can both wait out the current market with our existing investments while focusing on future investment opportunities. In the longer term, we're convinced of the attractiveness of our existing projects. I think it's worth pointing out and reminding everyone that some of these large development projects and investments have up to a 10-year horizon, and we have pretty good flexibility in timing those. Let's turn to Corporate Finance on page 15.
Catella Corporate Finance maintains a strong market position in all our remaining five markets, with exceptional strength in certain complex segments, you know, some residential advisory, debt advisory, and especially in valuation in the last couple of quarters. The current market uncertainties and the bid-ask gap between buyer and seller expectations are still pushing transactions forward in time. The traditional core transaction market was very slow in Q4. We can't shy away from that. There were still large complex portfolio transactions and restructurings occurring, something that we expect to see even more of through 2023 and hope to be a significant part of. Despite this market, Corporate Finance delivered a positive EBIT of SEK 11 million in the quarter and SEK 22 million for the full year.
Far, of course, from the record year of 2021, which had very, very high transaction volumes. Given the circumstances, not all bad. Of course, we're entering 2023 with a much better underlying earnings starting point, given that we no longer are burdened by material loss-making operations. I mentioned, you know, the need for valuation services has increased, as has the need for debt to capital markets advisory with the traditional credit markets really tightened and balance sheet needing strengthening. Those are the positive signs that we enter 2023 with. With that, before we go through the summary, I'll hand over to our CFO, Mattias Brodin, to cover the financial summary beginning on page 17.
Thank you, Christoffer, let me briefly cover the financial summary, focusing on items below EBIT. As Christoffer already mentioned, the strong quarterly operation profits was driven by Investment Management's strong performance, leading to improved operating profit of SEK 117 million, corresponding to a margin of 18% on growth level. Financial net continues to have a positive impact. This is mainly driven through the implementation of an improved intercompany lending structure, as well as positive currency effects, primarily from a weakened Swedish krona against euro. As a result of the strong quarterly earnings and improved financial net, earnings per share showed a slight increase to 1.1 SEK. Continuing to page 18, where we look at our financial and liquidity position.
Catella continues to have a strong balance sheet and equity ratio, supporting our future growth path, both in new investments and potential M&A activities. Compared to last year, total assets have increased with approximately EUR 0.5 billion to EUR 6.3 billion. The increase is mainly related to the property investments in Principal Investments and an increase in cash and cash equivalents. The liquidity at the end of the quarter improved with EUR 0.5 billion to EUR 1.8 billion compared to previous quarter. As Christoffer has mentioned, given the current market climate, we're comfortable with holding a larger proportion of cash. A good capital position and no short-term refinancing needs makes it possible to further explore both long-term value-creating opportunities and also have the firepower for opportunistic ideas. That was all regarding Catella's financials.
All right. Thank you, Mattias. Before opening up for Q&A, I'd like to briefly summarize the quarter from our perspective on the final slide, on slide 20. We're here summarizing a record year for Catella, which we obviously feel great about, and continue to feel positive about the strength of our underlying business model in three property-focused business areas. We delivered increasing revenues and improved operating results and continued growth of assets under management despite turbulent markets and a lot of uncertainty. We start the year with SEK 10 billion in capital commitments and additional significant liquidity in the funds, which makes it possible for our funds to continue to invest and grow in a very interesting point for the market cycle. We developed even more sustainability-focused products, where we see increasing investor interest.
We're all very pleased to launch our second Article 9 fund, Catella Leasis. Great investors behind us, committing just this week another SEK 1 billion. However, as markets continue to be in a, well, let's call it wait and see mode, it'll dampen the transaction market affecting all three of our business areas, and we must be even more focused on providing creative solutions for our clients. We have identified four prioritized strategic areas that we'll focus on in the coming years to continue our profitable growth journey. As a final point, again, it's hard to make any real predictions about how the market will develop. The yields and the prices clearly have moved, interest rates have moved, and, it's not unlikely that the transaction market remains slower for some time.
On the other hand, the underlying economic situation is pretty solid with some risk. Rents continue to be very strong in most of our markets. At the same time, price corrections and distressed situations opens up possibilities to invest in long-term value creation opportunities, both from our investing in properties, in property projects, through our funds, on our balance sheet, and of course, in opportunistic and strategic M&A. We're ready to act upon this with significant liquidity, with our analytical conviction, and of course, with 500 fantastic colleagues across Europe. With that, I would like to thank you all for listening and to open it up for questions.
Thank you. We will now begin the question and answer session. To ask a question, you may push star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the star keys. If at any time a question has been addressed and you would like to withdraw your question, please press star then two. Please hold while we pull for questions. The first question is from Patrik Brattelius of ABG. Please go ahead.
Thank you. Thank you. A few questions from my part. If we start off in Principal Investments, if we go to this Kaktus project, we can read in your report that the commercial part is expected to be finished during 2023. Can you talk a little bit more what is remaining here and perhaps a little bit more of a detailed expected timeline when it's expected to be finished?
Sure. By the way, good morning, Patrik. Nice to have you with us.
Thanks.
Kaktus is, as you know, a fully let from a residential perspective with very strong rental activity and high rents. I say high as in higher than we expected and hoped for, not high. Regarding the commercial space, we, as you know, we have leased some of them. We have one large space and one smaller space to be let. Both are in final stages of lease negotiations. There have been some technical and logistical challenges to sort the final design. We've passed those hurdles, so now we're in, you know, there's a couple of last commercial points and we anticipate finalizing those leases in the coming month or two months.
What remains then from that perspective is, you know, as with most leases, you have to fit out the space for the tenant. In, in a large space, depending on the tenant needs, that can be a pretty significant process. We will do this either ourselves with the tenants or if we sell the assets before we sell it with the lease and the buyer will fit it out together with the tenant. You know, it's not really affecting the exit process significantly. We, we hope that the leases should be done in the next couple of months, maybe three months at worst.
Okay. Thank you. Continuing on that topic, we saw no transaction taking place within this segment this quarter. Can you talk a little bit about the delta change here from quarter to quarter, this wait and see mode? Are buyers and sellers further apart compared to before or are you seeing steps that they are moving closer together? Or how do you view this?
I think it's a slow progress of getting closer. Every quarter we see, you know, small adjustments on the balance sheets across Europe where valuations are being adjusted downwards. At the same time, rents remain very strong. It is somewhat slow. If you look at some of the underlying big portfolio transactions, and you extrapolate what they really mean, you can see clearly that there is a repricing in market and no one's rushing. We're not rushing to sell. People are not rushing to buy. You're anticipating, you know, if there's not that much liquidity flowing into funds in the short term, there's less to be placed. There's a lot of capital on the sidelines, and there's a lot of interested buyers.
As you know, and as most people from history know, when there is a little bit of uncertainty, people tend to hold back, and then they go back to safe environments. We have, as you know, we talked about Kaktus. We have a couple of logistics assets here in Sweden that I can't say for sure, but they're imminent, let's call it that. You know, our development in Germany, whereas a year ago we would probably have exited now in a forward transaction, we're in a much better position to simply finish out the project in Q3 and sell a completed product so that we don't have both the market and product uncertainty, which is hard. It's clearly moving quarter by quarter.
Our forecast is that the first half remains a little bit uncertain and slow. After that, when the balance sheets are being corrected and valuations repriced, you know, there's a lot of liquidity that's gonna come back in our estimates, at least into the real estate market across Europe.
Interesting. Thank you. If I then shift over a little bit, towards the Investment Management, side. These, SEK 10 billion in committed capital, is there any reason why we shouldn't expect these to be invested and grow the AUM base the coming nine to 12 months in our forecasts?
Well, not really a reason. It's just like for the rest of the market, the investment opportunities has to be right. It has to meet both financial return criteria and sustainability criteria. That's the complicating factor. Now, there's a lot of that capital that is going to be deployed simply to finish projects under current development. There's a lot of that capital that will be deployed and converted into finished products and therefore AUM throughout 2023 automatically, basically. We're finishing those projects. When it comes to buying opportunities, no, there's nothing that says we can't. There's no... We're not holding it on purpose, of course. We wanna... We have to act, you know, with fiduciary responsibility. We have to act in our investors' best interest.
If that is to be very prudent for one more quarter, then we will do that. We have a lot of liquidity, we have a lot of opportunity, and we will clearly, you know, look to recycle that capital in a slightly lower entry point. Good news for us is in our funds, we use relatively modest leverage, so the increasing financing costs do not hurt those investments as much. No, but I think the velocity will be more towards the second half of the year if I had to predict.
Thank you. Thank you. Continuing on in this segment. If I understood you correctly, the fixed fees over the fixed cost should be able to generate at least SEK 50 million per quarter. If we talk about, we are in an inflationary market and environment. Do you foresee any major investment need impacting the cost base in this segment, the coming quarters?
There will be, I think as with every company, of course, a natural salary inflation. I mean, clearly we will compensate our staff appropriately. We are investing a little bit in digitalization that's gonna be that's a critical for long-term growth. You know, there's nothing that I see that will dramatically change the fixed fee picture. You know, the fees are strong. You know, we haven't seen capital outflows of any material level, and that's the only thing that could really change that picture.
Thank you. Yeah. My last question was a little bit on that topic. No, you see no pressure so far from investors on capital outflow pressure?
Very, you know. Fortunately, very modest to date. There's been, you know, one or two investors which we have very, very close and ongoing discussions with on how they look at that and why and where they're moving their money to. You know, the job that we have at hand is to find replacement investors if there's a bigger ticket. Fortunately, it's been relatively low so far. As you, as you know, in most of our funds, you know, you have a 12-month notice period, which, you know, makes it a little bit more sticky, of course, in the capital base.
Perfect. That was all for me. Thank you so much.
Thank you, Patrick. Have a great day.
You too.
This concludes our question and answer session. I would like to turn the call back over to Kristoffer for any closing comments.
Okay. Well, again, we just wanna say on behalf of Catella, all of us here, thank you all for listening and for your continued interest in our company and in our stock. We wish you all a wonderful weekend. Thank you very much.