{ "docId": "019dd923-622c-750b-8b97-54a6fb10e23b", "docSlug": "93911ff05740", "documentTitle": "Vivion Investments", "authorId": "51_Muddy_Waters", "authorName": "Carson Block", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2023-03-28 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 5, "pageCount": 36, "prevPage": 4, "nextPage": 6, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 8, "notes": "The slide is a text-heavy research note page with footnotes referencing financial filings.", "elementsJson": [ "paragraph", "footnote" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b97-54a6fb10e23b/5", "deckHref": "/decks/019dd923-622c-750b-8b97-54a6fb10e23b", "deckJsonHref": "/decks/019dd923-622c-750b-8b97-54a6fb10e23b.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b97-54a6fb10e23b#slide-5", "components": [ { "bbox": null, "kind": "callout", "text": "See Appendix: 78.6% Overvaluation", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "eea1b51d-47f6-49d8-b6dc-3e5f9258a1a3", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "callout", "text": "This strikes us as an implausibly high 78.6% year-on-year gain.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-1ac4-74a6-be3e-dc111e8fa160", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "fair value gain: 78.6%", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd953-1ac4-74a6-be3e-e1116273b5da", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "paragraph", "text": "At many German properties, Vivion uses a WeWork knockoff cofounded and majority-controlled (70%) by Dayan to drive up fair values by renting much of the lettable area. Rent24", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "bd1817e4-9f45-4660-ac91-1e4e3dd1ffdf", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "paragraph", "text": "Vivion misleadingly stated that rent24 is only 2.5% of its rent income in Germany. In reality, rent24’s occupancy share was likely between ~7% and ~11% in 2020, and Vivion gives no evidence that this has since changed. Vivion claimed that Mr. Dayan divested his interest in rent24 in 2017, but we aren’t convinced.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c080ddf5-0e2b-4a6f-99d5-1eaae0f59bfd", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "paragraph", "text": "Vivion bought them back again in 2019, valuing them at €152 million. Most recently, in the November 2022 €1b EMNT bond prospectus, Vivion reports their value as being €288.1 million, a gain in excess of 10x over approximately nine years.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "cb720205-da1b-4dd9-ba38-b9bfae9af500", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "paragraph", "text": "Turanco’s consolidated investment property values were based on fair values. In 2015, Turanco reported fair value gains of only 6% on its investment properties. In 2016, Turanco reported no fair value gains. However, as shown in the appendix, in 2017 – the year before Othelia was transferred to Golden Capital / Vivion – Turanco booked a €40.4 million fair value gain. This strikes us as an implausibly high 78.6% year-on-year gain. Assuming that these gains were attributable to Othelia’s properties, these almost certainly overvalued properties were among the 33 transferred to Vivion. Because Vivion used book value accounting to allocate purchase prices of the entities that transferred the 33 properties, it would have been free to revalue the properties again at the time of the acquisition.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d9b75fa7-3062-4989-8013-1f1c74ae337c", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "paragraph", "text": "Cyprus filings show that in 2017, the year before Vivion’s formation, one of Dayan’s entities took a 78.6% fair value gain on its portfolio of properties. It seems likely that these properties were contributed to Vivion. The properties in question were held by Turanco Investment Ltd. On April 2, 2018, Vivion’s subsidiary Golden Capital Partners acquired 33 properties through “several share deals”. Per Golden Capital’s 2018 filings, one of the entities it acquired was Othelia Ltd. Through 2017, Turanco Investment Ltd. consolidated two significant 100%-owned subsidiaries: Vaprita Holdings Ltd. and Othelia.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f91c6c5c-5100-4b8d-ae4b-e7e6b9afbba6", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "source-note", "text": "Footnotes 17-22 detailing financial statements and specific filings.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a203a273-5e00-4ce8-a0f9-e9179d2ed8d0", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 5, "from": 3, "beatId": "ae9c8eae-5c58-4997-acd2-141c786c6bc8", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Problem", "beatSlug": "problem-agitate-solution-problem-identify-pain", "evidence": "The document identifies inaccuracies in Vivion's formation story and property valuation", "position": 0, "confidence": 0.8, "parentBeatName": "Complication", "parentBeatSlug": "complication" } ], "loops": [ { "to": 9, "from": 4, "name": "Iceberg", "slug": "10-iceberg", "bestFor": "Consulting, complex problem solving, organizational change", "matchId": "8e299f6b-0cd0-4152-b930-20df825dd8c8", "evidence": "The document uncovers inaccuracies in Vivion's property valuation", "position": 0, "objective": "Reveal hidden information about Vivion's properties", "structure": "The Symptom (Visible) -> The System (Hidden) -> The Root Cause", "confidence": 0.7, "description": "Reveal that the visible problem is merely a symptom of a deeper root cause" }, { "to": 36, "from": 2, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "c267ed65-eae5-4441-a31b-25299c9e8ace", "evidence": "The document emphasizes the importance of accurate information for investors and regulators", "position": 1, "objective": "Highlight the consequences of not correcting misinformation", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.6, "description": "Quantify what happens if the audience does nothing" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }