The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
He plans to build a team in the coming months for the Stockholm-headquartered firm which was founded 10 years ago and now has assets under management of $6.4 billion. He has a target of sourcing 10% of funds from Asia within five years. East Capital is approved by UBS and HSBC, who may be of future help in local distribution.
The new officeÆs primary objective is to attract Asian investors into its range of Ucit-approved funds, all of which are currently beating local benchmark indices, together with institutional/high net worth-oriented across a range of private equity offerings.
With regard to these, East Capital has four separate funds branded with the name of the Northern Pacific Ocean explorer Vitus Bering, in the form of æBering FundsÆ, which combine public and private equity and illiquids in each of Russia, Ukraine, the Balkans and Central Asia.
Additionally, East Capital has niche private equity funds including a Baltic states property fund and a $650 financial institutions fund.
For fund managers involved in Eastern Europe, Russia is invariably going to appear at the top of everybodyÆs list, usually followed by Turkey, the Czech Republic, Hungary and Poland. East CapitalÆs weightings see those last three replaced with Kazakhstan, Ukraine and Romania.
ôIn the market turmoil most of the markets in which we focus, with the exception of Turkey, have been less volatile than western markets because there is less foreign funds flow,ö says Peter Elam Hakansson, chairman and co-founder of East Capital, during his visit to Hong Kong to inaugurate the new office. ôWhilst the oil and minerals sectors have performed strongly, we prefer to concentrate on local consumption stories, which in turn have done very well as a direct result of the wealth generated from resources.ö
This is borne out by the fact that today one has to possess Western European levels of wealth simply in order to buy a residential house in Kazakhstan.
In Kazakhstan, East Capital bought out an 8% stake that Raifeissen bank held in Bank Turan Alem and has invested in a 5% stake in Chagalla Property in Atyrau, which is a boom town on the Caspian Sea, close to the Kashgan oilfields. They have an aggregate of $500 million in Kazakstan and they believe they are the largest institutional fund investor there.
Their holdings include a 20% stake in Asia Pacific Bank in Blagovechensk, which is on the Russian border with China, and a 20% stake in Kolyma Bank in Magadan on the Kamchatka pensinsula.
ôBy virtue of our Kolyma Bank investment, in a physical sense we invest further east than either Japan or China,ö adds Peter Elam Hakansson.
Looking at the map of Tartary subsequently corroborates his geography. Private equity opportunities even further east on the Aleutians or Midway Island would appear to be limited to sea otters and Gooney birds respectively.
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