Estonia, Financial Services, Funds, Investments
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Thursday, 25.04.2024, 10:05
EfTEN Capital launched its fourth real estate fund with a first closing of 95 mln euros
Established
as an Estonian limited partnership (usaldusfond), EfTEN Real Estate Fund 4 is a 10-year closed-end fund designed for
institutional investors. It will invest in cash flow generating commercial real
estate properties in the Baltics. The fund is not offered publicly. The fund
will continue the successful investment strategy of EfTEN Kinnisvarafond II AS, providing to institutional investors
exposure to the Baltic real estate market by investing in large scale
commercial cash flow properties such as office, retail and logistics. The
investment strategy of the fund does not allow the fund manager to take
development risk. Minimum single investment is set to 15 mln euros. To complete
the foundation of the fund, it must be registered in the commercial register.
“The
strategy of the new fund is to invest mainly in core/core+ properties with good
location, moderate risk and proven rental cash flows, which is similar to the
strategy of our second fund that concluded the investment period by achieving
its target size. The investment strategy of our third fund EfTEN Real Estate Fund III AS, listed on Nasdaq Tallinn, is clearly more opportunistic, the size of an
average investment is lower and hence it’s not competing with the new fund”,
commented Mr Viljar Arakas, the CEO of EfTEN Capital AS.
Mr Arakas
added: “The target size of the new fund has been set to 120 mln euros of
equity. We have 18 months from the first closing to reach the target size,
therefore it is rather extraordinary that the first closing was completed on
such high level of 80%. On one hand, this shows a continuing interest towards
the asset class, on the other hand it demonstrates trust to the work we have
done and the new plans we have“. The investor pool includes Baltic pension
funds, life and non-life insurance companies and the fund manager’s partners.
EfTEN Real Estate Fund 4 may use up to 60% of bank loans
which means the total fund size may increase up to 300 mln euros. “While 15 mln
euros is the minimum ticket, then in reality we want to select properties in
the range of 30-50 mln euros market value”, Arakas commented. The establishment
of the fund was advised by the law office Deca
Legal.