Finnish private equity trio launches new firm

Three former directors at Nordic private equity firm Sveafastigheter have launched a new real estate investment management firm focused on the Finnish market.

Patrick Gylling, Jonas Ahlblad and Matti-Pekka Sävelkoski, who have worked together for years at Sveafastigheter, have founded Sirius Capital Partners, a new management-owned investment manager focusing on opportunistic and value-add real estate investments in Finland.

Sirius will continue to run the Finnish holdings of Sveafastigheter's €350 mln Fund III. The new company will be led by co-founder Gylling, the former CEO of Sveafastigheter who led the opening of the company's Finnish office in 2010. In connection with his departure Sveafastigheter´s Helsinki office was closed down in June 2014.

The new company will make co-investments on a deal-by-deal basis and will concentrate on property investments where it can create value by repositioning the assets and putting them back onto the market as core product.

The firm is targeting a return of between 15% and 20%.

'Once we have identified the investment opportunities, we will seek to finance the equity side through co-investments with institutional capital, or other firms, or alternatively we could raise a small fund,' Gylling told PropertyEU.

He added: 'There is a lot of demand for core assets in the country. International investors in particular are targeting Finland which currently offers a very attractive investment story. Like-for-like yields are about 100 basis points higher than Sweden while real interest rates are 200 bps lower meaning that cash-on-cash returns are significantly higher in the country compared to Sweden.'

Gylling, who was replaced at Sveafastigheter by GE Capital Real Estate's former Nordic boss Johan Tengelin, previously worked for MSREF, Advium Corporate Finance and HGR Property Partners.

Sveafastigheter is a fund manager focusing on investments in Sweden and Finland, and secondarily on acquisitions in Norway and Denmark. It currently holds a portfolio of around €1.3 bn of assets after having agreed the €124 mln sale last month of a portfolio of 68 grocery stores located across Finland to the Swedish property company Trophi Fastighets, which is managed by Stockholm-based Redito.

The closed-end fund is fully invested and is currently in its divestment phase.