European hedge fund acquires North Real Estate Opportunities Fund

Absolute Capital Management has acquired a private equity real estate fund and plans to launch a property-focused hedge fund as part of its drive into the European real estate sector.

Mallorca-based hedge fund Absolute Capital Management has acquired the management contract of Eastern Europe-focused North Real Estate Opportunities Fund for €12.5 million ($17 million).

Absolute said that the vehicle, renamed Absolute Real Estate Opportunities Fund, will be used as a platform for expansion into the real estate sector. The firm also revealed plans for a long/short global property hedge fund, which could raise up to €200 million.

As part of the takeover agreement, North Real Estate co-founders Robert Provine and Magnus Lofgren are joining Absolute to help expand the real estate platform.

Focused on property in Romania, the Ukraine and Moldova, North Real Estate has invested most of the €100 million it raised in an IPO on London’s Alternative Investment Market (AIM) in August 2006. Under its new name it will seek to raise additional capital to fund further projects.

Absolute was founded in 2004 and went public on AIM as part of a growth strategy. Part of that strategy is to manage diversified funds that can perform well in volatile markets and to expand by acquiring smaller managers.

Sean Ewing, chairman and chief executive officer at Absolute, said in a statement: “We are very pleased to have to have made the first step in the creation of a significant real estate fund management capability.”

The firm has 11 funds and has offices in the Cayman Islands, Switzerland, UK, Singapore, Spain, Cyprus, Poland, Brazil and Argentina.