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EfTEN Special Opportunities Fund to invest in Baltic real estate projects that are facing funding gaps
EfTEN Capital AS, the largest real estate fund manager in the Baltics, has launched a new fund for institutional investors. The EfTEN Special Opportunities Fund invests in real estate projects that require additional financing to continue their operations.
The fund has an initial equity of €25.4 million, which can be increased to a maximum of €75 million within six months. The fund’s major investors include Estonian and Latvian pension funds.
“Rising interest rates and several quarters of recession are taking their toll on the real estate sector. On the one hand, banks have become more conservative in financing real estate projects. On the other hand, the higher cost of credit and uncertain business cycle outlook have led to lower client activity in the real estate sector. As a result, investment opportunities have emerged in the sector, where even projects with a reasonable long-term business plan are facing financing shortfalls”, commented Kristjan Tamla, Managing Director of EfTEN Capital AS.
“EfTEN has always profiled itself as an ‘active investor’ in the real estate sector, being able to invest in distressed properties or properties requiring a concept change. With the new fund, we are ready to provide additional equity and debt capital to real estate projects with funding gaps. The aim is, in cooperation with the real estate projects’ founders, to complete sensible initiatives that have stalled as financing conditions have tightened. As active investors, we will generally take responsibility and joint control with the founders to see projects through to completion. Although the fund is primarily aimed at large institutional investors, Baltic retail investors can invest in the fund through the EfTEN United Property Fund”, said Tamla, when describing the fund’s investment principles.
EfTEN Capital AS manages seven real estate funds operating in the Baltics, a portfolio of 64 commercial buildings with a market value of EUR 1.1 billion.