Few investors talk about the period before a crisis as the part that defined them.
Dániel Jellinek does.
What mattered was not what he did when Lehman Brothers collapsed in 2008, but what he had done in the two years before it, and the order in which he did it.
He sold the portfolio when the market was still rising, preserved the liquidity when competitors were still buying, and re-entered when the pricing had fully reflected the damage. Each decision followed logically from the last, and together they produced Indotek, a business that emerged from one of the most destructive economic episodes in recent European history with more firepower than it had going in.
Building the Pre-Crisis Portfolio
Through the late 1990s and into the mid-2000s, Indotek built a substantial position in the Hungarian commercial property market. The portfolio was concentrated in B- and C-class offices and warehouses, functional properties acquired at valuations that reflected their condition rather than their potential, and where active management could generate meaningful value creation.
As Hungarian real estate values rose through the mid-2000s, two things happened simultaneously. The first was that Indotek’s portfolio appreciated sharply, a validation of the early acquisition logic. The second was that new opportunities in the market began to thin out. The conditions that had made the Hungarian market productive for Indotek’s approach were narrowing. Capital was flowing freely, credit was abundant, and rising competition for assets was compressing the gap between acquisition price and underlying value, the gap that Indotek’s operational model was built to close.
“We are good at numbers, we are unpretentious, and we look at assets where we can add value,” he told the FAZ.
The corollary of that discipline is that when the numbers stop working, when yield compression and rising prices push assets past the point where value can be added at an acceptable return, the right move is to stop buying. And when assets already held have appreciated to the point where the price-to-value relationship has normalised, the right move may be to sell.
Pre-Peak Disposal
In 2006 and 2007, Dániel Jellinek sold the bulk of Indotek’s portfolio. The timing came from the same valuation logic that had governed every acquisition: assets had appreciated to the point where the return conditions that Indotek’s approach required were no longer available, and holding paper gains was a different activity from the active value creation the business had been built around.
The decision came at a cost. Selling before a peak means leaving money on the table relative to whoever holds longest before the crash. It means sitting in cash or near-cash while competitors are still posting unrealised gains. It means explaining to partners and investors why you have exited a rising market. It means being right and deeply unpopular at the same time, a combination that has ended more than a few investment careers. None of that is comfortable. The analysis is straightforward; the required discipline is psychological: the willingness to act on the numbers when the numbers say one thing and the market momentum says another.
Hungary was hit particularly hard by the global financial crisis. When Lehman Brothers collapsed in September 2008 and credit markets froze across Europe, Hungarian real estate was among the most exposed: a small, illiquid market that had attracted substantial foreign capital during the boom, and where the unwinding was correspondingly severe. Assets that had been bid up through 2006 and 2007 repriced sharply. Developers who had leveraged into positions found themselves unable to refinance. Banks that had extended credit at compressed spreads began managing workout portfolios rather than making new loans.
Indotek, having sold the bulk of its portfolio before the crisis, navigated this environment from a position that most of its counterparts did not have: liquidity. Competitors were managing distress. Dániel Jellinek was able to observe the market from the other side of the trade and wait.
The Re-Entry
Waiting is underrated as an investment skill. The temptation in any crisis is to move early: to call the bottom, to be the first buyer back into a falling market. Dániel Jellinek did not do that. He waited until 2009, when the depth of the crisis was clear, the pricing had reflected it, and the conditions for a structured re-entry had been established.
The first step was bringing in institutional capital. The Bohemian Group, the Colorado-based family office of the Stryker family, founders of the US medical technology company, had been an early international investor in Dániel Jellinek’s career. By 2009, when he indicated it was time to buy again, they invested directly into the business, with a 30% stake that grew over time. More consequentially, the relationship opened Indotek to a wider institutional investor network, including CarVall, the investment arm of Cargill. In 2022, Jellinek bought back the Stryker family’s stake in full, returning Indotek to independent ownership.
The vehicle for the re-entry was non-performing loans. Rather than buying real estate directly, Indotek began purchasing distressed loan portfolios from banks including Intesa, Raiffeisen and BayernLB, debt that banks needed to remove from their balance sheets and were willing to sell at substantial discounts to face value. The mechanism was the same one Dániel Jellinek had been using since the early 1990s: buy something broken, at a price that reflects the breakage, and work through the resolution. The difference was scale and sophistication. The early Budapest deals were individual properties bought from liquidators. The post-crisis deals were structured loan portfolio acquisitions, converting distressed debt into ownership of warehouses, offices and retail assets across Hungary.
EU grant funding available in Hungary at the time added a further dimension. The grants could be applied to renovation and leasing of acquired buildings. The effect was a lower cost of repositioning and a faster path to stabilised income. The counter-cyclical re-entry was a structured programme of acquisition, renovation and leasing that built operational momentum through the downturn, well beyond a passive bet on recovery.
Klépierre Exit and the Retail Pivot
By 2013, a new opportunity had appeared. The French shopping centre specialist Klépierre decided to exit Hungary. Secondary retail assets came to market as part of a portfolio rationalisation. For most institutional buyers, secondary Hungarian retail in 2013 was not an attractive proposition: the market was still recovering, the assets required active management, and the return profile demanded the kind of operational engagement that core capital does not provide.
For Indotek, it was precisely the situation the business had been built to address. Dániel Jellinek began buying the secondary assets Klépierre was selling and repositioning them into community shopping centres targeting local consumer demand, anchored with discount retail brands of the kind that proved resilient through economic downturns. The retail strategy that followed built what is now approximately 1 million square metres of retail exposure in Hungary.
The Klépierre trade illustrates something important about counter-cyclical investing that is often missed. The cycle produces a sequence of opportunities across the recovery period, as different sellers reach different decision points at different times. A single buying window at the bottom is the simplified version of a more extended reality. Klépierre’s 2013 exit came five years after the crisis peak, when many investors had already concluded that the recovery was underway and prices were rising again. Dániel Jellinek was still buying, because the gap between acquisition price and what operational intervention could deliver remained wide enough to meet Indotek’s return requirements.
