BALTIC STATES - Fund manager East Capital has taken sole control of a joint venture set up to manage its Baltic property funds and expressed optimism for their performance despite an economic downturn in their target markets.
Gert Tiivas, chief executive of East Capital Explorer, said the firm had acquired Baltic real estate firm Arco Vara's 50% shareholding of AVEC Asset Management - and with it management of the Baltic Property Fund and Arco Baltic Real Estate Portfolio, which have a combined value of €220m.
East Capital launched the joint venture three years ago as a means of gaining real estate experience.
"Teaming up with the leading Baltic real estate firm made sense," said Tiivas.
"Now we have gained experience in the field and also built up our own real estate team, so it is only natural to take full control and responsibility for the company and the funds it manages."
AVEC Baltic Property Fund was East Capital's first property fund and invests in income-producing commercial properties, including offices, shopping centres, warehouses and hotels.
"Although the Baltic real estate markets are undergoing a correction right now, we are very happy with the fund's portfolio and see it performing very well," said Tiivas.
Earlier this month, East Capital chairman Peter Elam Håkansson told IPE Real Estate it would boost its investment in the Russian market, claiming consumer confidence would boost Russian retail as it launched a €200m fund to invest in provincial shopping centres.
Håkansson said the fund manager also planned investments in the country's infrastructure, notably in utilities scheduled for deregulation by 2012.
East Capital has assets under management worth €4.4bn.