A new way of investing in Russia
Having commenced its operations in June 2006, EPI Russia I Ky is Finland's first real estate equity fund investing in Russia, and is one of just the few real estate equity funds that focuses on the Russian real estate market.
Investor interest in the Russian real estate market has increased substantially in recent years. The market is challenging, but is also extremely interesting from the real estate investor's point of view, given its significant development potential. Due to the substantial shortage of high-quality business premises that meet current requirements in St. Petersburg and Moscow, the fund's main target regions, the investment activities of EPI Russia I are focused especially on property development.
EPI Russia I is intended especially for professional investors, providing an opportunity for them to contribute to the development of Russia's real estate market through the fund. Investments in the fund can be made until March 2007, after which the fund will be finally closed.
If you are interested in investing or desire additional information on the fund, please see the contact information page for the relevant addresses.
Fund overview
EPI Russia I Ky is a closed real estate equity fund in the form of a limited partnership company which invests in business premises in the Russian real estate market - especially in the St. Petersburg and Moscow regions. The Fund's investment portfolio is managed by EPI Russia Partners I Ltd, a joint venture between Evli Property Investments Ltd and Catella Property Oy.
The fund was closed for the first time in June 2006, when its anchor investors, Varma Mutual Pension Insurance Company and the Local Government Pensions Institution gave their investment commitments. Investments in the fund can be made until March 2007, after which the fund will be finally closed. The target size of the real estate portfolio is EUR 300-400 million.
| Fund: | EPI Russia I Ky | | Fund type: | Fixed-capital (closed) real estate equity fund | | Legal structure: | Finnish limited partnership | | Closing of the fund: | March 2007 | | Investment period: | 2 years after closing of fund | | Fund’s operating period: | 6 +/- 3 years | | Geographical weighting: | Russia | | Main types of premises: | Commercial, office, industrial and storage | | Fund’s target size: | EUR 300-400 | | Equity: | EUR 100-150 | | Loans: | No more than 70% of real estate porfolio’s acquisition cost | | Return target: | Over 15% leveraged internal rate of return (after expenses, fees and corporate tax) | | Minimum subscription: | EUR 2 million |
Investment strategy
Real estate portfolio
EPI Russia I invests in the Russian real estate markets, where it focuses especially on business, office, warehouse and logistics properties in the St. Petersburg and Moscow regions. The fund may also invest in properties in other Russian cities.
EPI Russia I's investment strategy is opportunistic. In other words, it seeks high returns from Russia's challenging (in terms of risk) real estate market. The main area of focus is on developing properties, as all Russian real estate sectors suffer from a shortage of high-quality business premises that fulfil current requirements.
The fund's portfolio is mainly composed of large properties in promising locations. EPI Russia I actively seeks suitable sites on its own. It also gets help from local partners, a local advisor network, banks, Finnish manufacturing companies and Finnish businesses.
Evli Property Investments Ltd and the fund's real estate portfolio manager, Catella Property Oy, are responsible for the management of the fund. Together, they founded the joint venture EPI Russia Partners I Ltd to manage and administer the real estate portfolio of EPI Russia I on behalf of investors.
Return objective
The fund's objective is to achieve a return that exceeds 15 percent on equity (leveraged internal interest rate) after costs, fees and taxes.
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