Genesta is raising capital for a second pan-Nordic fund targeting non-core commercial real estate in major cities.
The Stockholm-based fund manager is looking to secure between €250m and €300m from institutional investors for what would be its second fund. The closed-end, seven-year vehicle will be leveraged at 50% ratio and target an IRR of 13% to 14%.
Anders Palmgren, Genesta senior director for fund raising, said: “The core to value-add spread is at a record high and, up until now, investors have been more focused on core.
“But what we’ve found is that the four Nordic countries’ cycles provide diversification.
“Finland, for example, hasn’t come back like Sweden has, while Denmark is still dealing with legacy issues and not through its workout stage yet.”
Palmgren, who co-founded Genesta in 2003, has returned to the firm to manage fund raising after six years at Catella. Genesta, he added, is looking beyond the Nordics for institutional investors for the latest fund and will begin sourcing investments alongside capital raising, using advisory firm Capra Global Partners.
Genesta’s first fund, Genesta Nordic Baltic Real Estate, launched in 2007 and also targeted commercial value-add properties. The fund attracted investment from 12 European institutional investors and was fully invested in Finland, Sweden, Norway and Lithuania.