East Capital takes control of two Baltic funds

Swedish firm East Capital has bought out joint venture partner Arco Vara’s 50 percent interest in AVEC Asset Management, which manages AVEC Baltic Property Fund and Arco Baltic Real Estate Portfolio with assets of €220m.

East Capital, a Stockholm-based firm focused on emerging markets in the former Soviet Union and Warsaw Pact countries, has acquired the remaining 50 percent holding in AVEC Asset Management from Arco Vara.

Founded in 2005, AVEC Asset Management has invested in office buildings, shopping centers, wellness centres, hotels and industrial buildings in Estonia, Latvia and Lithuania.

It manages two funds, AVEC Baltic Property Fund and Arco Baltic Real Estate Portfolio, with a combined total value of approximately €220 million ($345 million).

 “Our joint venture cooperation since 2005 with Arco Vara has been mutually beneficial,” said Gert Tiivas, head of East Capital’s Baltic office, in a statement. “Now we are ready as sole owner of the company to take full responsibility as a long-term investor for the development of the business.”

East Capital currently manages €4.4 billion worth of property in 29 countries. Last month the firm launched a €200 million Russian property fund that will invest in shopping centers and other retail investments in regional cities in Russia, redeveloping properties that saw poorly planned construction in the 1990’s. That fund is targeting a 15 percent IRR.