East Capital returns Russian fund equity to investors

Swedish independent asset manager East Capital has decided to terminate its Russian property fund and return the equity to investors. The East Capital Russian Property fund was launched in 2008 but has not made any investments.

'As the crisis hit, our highly qualified team made a diligent decision to stay out and wait until the price fall would stabilise,' said Kestutis Sasnauskas, CEO of East Capital Private Equity and partner at East Capital.

'In this post-crisis environment, despite intensive efforts, it proved impossible to realise our initial investment strategy within a reasonable timeframe. Acting in the best interest of our investors we have decided to close the fund and return the money to our investors. This decision does not affect our strong belief in the rapidly developing Russian consumer market,' Sasnauskas said.

Following the closure of the fund, the capital in the fund will be returned to the investors, including East Capital Explorer, and the investors' remaining commitments will be released.

East Capital Explorer committed EUR 40 mln to the fund in May 2008. By the end of May 2010, EUR 600,000 had been used to cover costs arising from the creation of the fund. Total costs upon final closure are put at EUR 1 mln.

East Capital Explorer will not pay any management fees to East Capital which means it will have EUR 67 mln in cash available for further investments.

East Capital Explorer is a Swedish company created to make investment opportunities in Eastern Europe available to a broader investor base. The company invests mainly in East Capital's private equity and semi-public equity funds that provide exposure to companies not otherwise accessible via the local stock exchanges in Eastern Europe.