Stellar Asset Management is launching the Stellar Baltic States Fund, its first investment fund for UK investors, which aims to capitalise on the developing property market in the Baltic s
Stellar Asset Management is launching the Stellar Baltic States Fund, its first investment fund for UK investors, which aims to capitalise on the developing property market in the Baltic states, working in partnership with regional property specialist Bristol & Stone and Capital City Developments.
The fund’s strategy is to develop a diversified portfolio aimed at providing asset growth over the short to medium term. The fund will explore both development and planning changes as well as more conventional opportunities.
The Stellar Baltic States Fund will seek to provide investors with annual total returns of 15 per cent. A closed-ended limited partnership, the fund is seeking to raise GBP10m, with a minimum investment of GBP25,000. Initial commission of 4 per cent and 0.5 per cent trail commission are available for financial advisers.
‘This is a particularly exciting venture as the fund has been seeded with six properties, allowing investors entry at the original purchase cost,’ says Jonathan Gain, chief executive of Stellar Asset Management. ‘There is a window of opportunity to invest before the first valuation, at which time there may be an uplift in value.
‘We have known Bristol & Stone, the fund’s property advisers, for many years, and have been impressed with their ability to source interesting transactions where there is excellent potential for generating substantial returns.’
Stephen McKeever, the firm’s property director, says: ‘The real estate market in the Baltics is not yet a decade old, so it continues to change and develop quickly. It is important that any investment strategy maintains the flexibility to adapt with the market over the coming years. The fund will be investing in areas where the local market shows greatest demand.’
All the directors of Stellar Asset Management were previously employed by Close Brothers Investment and offer a combined 40 years of investment management experience, especially in developing and launching products investing in both the commercial and residential property sectors.
This approach has now been adopted by Stellar and provides the rationale behind launching this new fund of offering private investors the opportunity to invest into the Baltic states, benefiting from diversification of their property portfolios into a region where exceptional gains are still capable of being generated.
According to Stellar, the property culture in the Baltic states favours ownership over rental, with most people owning property after it was returned by the state following the end of Communist rule and the dissolution of the Soviet Union.
The firm says the Stellar Baltic States Fund will work with a local partner capable of finding deals that local vendors rarely take to the market. This approach is designed to bring access to a wide range of deals and enable the fund to respond more quickly than foreign-based investors who would need time to familiarise themselves with the wider market context.