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EfTEN invested EUR 110 million in new properties in 2015
The past year, 2015, has been the busiest one in EfTEN’s history. Under EfTEN Capital’s management, our funds invested in a total of 5 new properties worth EUR 110 million in aggregate, taking EfTEN’s total assets under management close to 400 million euros. As stand-alone properties, three major investments – the Radisson Blu Sky Hotel in Tallinn, the Saulės Miestas shopping centre in Šiauliai and the Duntes office building in Riga are all the biggest single investments made by EfTEN in its corporate history. It is our strategic choice to invest in larger stand-alone properties and to divest smaller investments. Out of all the investments, 42% were in Estonia (Radisson Blu Sky), 22% in Latvia (Duntes office building) and 36% in Lithuania (Saulės Miestas in Šiauliai, Mėnulio 11 and Ulonų commercial buildings in Vilnius). Furthermore, 2015 has marked the start of our business operations in Lithuania. We invested 40 million euros to Lithuania in the first year.
Whereas in 2014 just one fund was managed by us, one year later the number of funds has increased to three. As the investment activity of our debut fund, EfTEN Kinnisvarafond AS, concluded we launched two funds with different investment strategies on the market:
– EfTEN Kinnisvarafond II AS, focused exclusively on core properties (that is to say, the best known major commercial buildings) in the Baltic capitals. Geared primarily towards institutional investors, the fund’s minimum investment per property is EUR 15 million.
– EfTEN Real Estate fund III AS is focused on a value-added, opportunistic strategy. What is more, the fund does not stop at investing in capital cities only. Geared towards private investors, the fund’s minimum investment amount per property is EUR 3 million.
The investment strategies of the two new funds are so different that no conflict of interest will arise when it comes to new investment properties. All of EfTEN’s funds are subject to supervision by the Estonian Financial Supervision Authority and conform to the AIFMD, the Alternative Investment Fund Managers Directive of the European Union.
EfTEN’s home market is the Baltic States, and we have no investment preferences among the three countries: we invest in properties that we consider to be the best, regardless of the Baltic State in which they are located. History has taught us that the three Baltic States trace a very similar trend macro-economically. Both in periods of recession and growth. Of course, every country comes with its own cultural and business specificities, which must be always kept in mind when investing.
Since the launch of its operations in 2008, EfTEN Capital has invested a total of EUR 293 million in the funds under its management, including a total of EUR 72 million in the first five years, EUR 63 million in 2013 and EUR 49 million in 2014. However, the pace of investment is not a separate criterion for us. We never set ourselves investment objectives for a year. That would be wrong and inappropriate, causing undue pressure on the fund manager to invest the capital. Our investment managers are constantly working on new investments; however, we only go through with them if we identify projects that meet our conservative criteria. If none can be found, we will not invest. We are not known for being the most optimistically minded investors on the market. We definitely intend to continue in this vein. One has to keep a cool head, particularly in the current zero interest environment where many competitors exhibit an increasingly optimist sentiment.
We would like to thank all our investors, tenants, advisers, banks and many other business partners who have worked with us during the past, successful year. Needless to say, we give a special thanks to all of our 33 colleagues! It is our belief and hope that we will have many more years like 2015 – we are working on it.
Happy New Year!
Viljar Arakas,
EfTEN Capital CEO