CapMan has launched CapMan Real Estate I Ky, a E500m private equity real estate fund backed by nine Finnish insititutional investors. The expansion of business operations into private equity real estate funds is a significant strategic step for CapMan and the new fund raises the total capital managed/advised by CapMan to
Investors in the fund include Veritas Pension Insurance Company, Veritas Life Insurance Company, Etera Mutual Pension Insurance Company, Suomi Mutual Life Assurance Company, Varma Mutual Pension Insurance Company, Kaleva Mutual Insurance Company, Local Insurance Mutual Company, Sampo Life Insurance Company Ltd and The State Pension Fund.
The fund’s investment focus is on commercial premises in the Helsinki metropolitan area and CapMan has already acquired 17 properties in this area for E220m. The best-known asset in the portfolio is the Bronda property located on Eteläesplanadi in Helsinki’s city centre. The majority of assets comprise modern office buildings with vacancy rates of around 5%.
Jukka Iivari, chairman of the board of CapMan Real Estate Oy, says: “The long-standing low interest rate level and subsequent increase of investors seeking returns on real estate investments creates positive expectations for appreciation in property values. A substantial proportion of Finnish real estate deals in the past two years have been won among others by international private equity real estate funds, because of their favourable capital structure. CapMan’s new private equity real estate fund, which uses the same type of capital structure, now introduces a competitive opportunity for Finnish investors
Private equity real estate funds are a growing trend in Europe. Indirect real estate investments have grown strongly in the UK, The Netherlands and Germany in particular, and it is estimated that there are some 400 non-listed European real estate funds at the moment. Real estate fund activities are at an early stage in the Nordic countries, and CapMan is one of the first private equity investors to introduce the concept to Nordic markets.