CEE fund raises €100m in LSE debut

North Asset Management defies skeptics by listing a €100m property fund focused on EU accession states.

North Asset Management has floated a property fund on London’s junior AIM stock market concentrating on emerging European markets.

Called the North Real Estate Opportunities Fund, it has raised €100 million ($128 million) to be invested primarily in the real estate markets of Poland, the Czech Republic, Slovakia, Hungary, Romania and Bulgaria.

The seven-year opportunity fund is seeking annual returns in excess of 20 percent and is managed by Robert Provine, a former director of Consensus, the private property and technology investment company run by Vincent Tchenguiz, and Magnus Lofgren, a former director at Resolution Property.

North Asset Management, which was set up in 2002 and manages $1 billion on behalf of hedge funds and real estate fund clients, becomes the latest institution to list such a property fund.

So far this year eight companies or funds have either listed on AIM or expressed an intention to do so, leaving them open to market apathy.

Over the summer, several pulled the plug on plans due to a combination of weak equity markets and perceived lack of appetite for more Central and Eastern European-focused property funds.

Although parts of emerging Europe have already seen yields reduce significantly as a result of demand for real estate, many believe there are attractive returns to be had in as yet untapped territories. Strong economic growth, improvements in property law, and rising incomes are all reasons why investors are targeting Romania, Bulgaria and Croatia, for example, which will join the EU by 2009.