EUROPE - The pension fund for mobile phone giant Ericsson and Finland's Tapiola are among the institutional investors committing around €45m to a real estate fund by a new Swedish start-up.

Nordika Fastigheter - launched last year by former Lehman Brothers Real Estate Partners executive director Jonas Grandér and Gabriel Cronstedt - has raised a total of €50m in capital.

It will target properties in the company's native Sweden, as well as neighbouring Denmark and Finland.

Of the €50m in capital committed, approximately 10% was contributed by the two co-founders.

Speaking to IP Real Estate, Grandér said all current commitments were from four pension funds, including Ericsson's Swedish scheme, the €9.3bn Tapiola fund and the two Swedish funds for construction companies Skanska and Atlas Copco.

He added that 70-80% of properties would be sourced in Sweden, as it was not only the largest market but also the one with the highest turnover.

While conceding that Sweden was more expensive than its other two target markets, Grandér argued that it was the price to be paid for accessing the country's stable economy.

"We might get slightly lower returns, but we also have less risk than if we entered into any of the other EU markets," he said.

"We feel very comfortable investing in Sweden in particular, but also Finland and Denmark and basically leaving out Norway."

Grandér explained that Nordika had decided to exclude Norway after studying market prices dating back 14 years and concluding that property prices were too closely linked to that of oil.

"In our view, as a real estate investor, you will actually gain oil exposure," he said. "If our investors want oil exposure, they should not invest in a real estate fund.

"That's, of course, a broad generalisation, but the correlation between property and the oil price is almost perfect."

Looking towards the Danish market, Grandér said they were in discussions to assume the loan books of some the country's banks.

"In Denmark, we find quite a lot of opportunities within the banking system, where a lot of debt has defaulted or is about to default," he said.

"Given the distressed situation, there a lot of attractive opportunities at the moment."

Grandér added that he expected to exhaust the fund's allocation over the next 2-3 years, with the aim of increasing assets under management to as much as €250m.

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