CBL Asset Management

Citadele's Subsidiary IPAS CBL Asset Management Establishes New Investment Fund

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CBL Asset Management IPAS has registered a new alternative investment Fund – Baltic commercial real estate fund. The purpose of the Fund is to offer solid returns under the conservative real estate investment strategy in the Baltic states.

The main purpose of the fund is to generate steady cash flows with less emphasis on potential capital gains from market shifts. The Fund will invest in commercial real estate in the Baltic states. Key target segments will be offices and retail. The main criteria for property selection are high liquidity properties in different market conditions and property competitiveness to ensure their successful operation in the long term.

“Considering the present low interest rates, institutional investors are increasingly interested in alternative investments, especially in commercial real estate”, comments Andris Rengitis, CBL Asset Management head of real estate department. According to Prequin agency data, during 2014 top 25 Europe-based public pension funds had an average allocation of 14 % of total assets into real estate. According to CBL Asset Management research this amount in the Baltics is around 2 % with the majority of investments located in Estonia.

“Current prime commercial real estate yields in the Baltics are 7.0–7.5 %, and we expect to be able to offer our investors return on equity exceeding 12 % through exercising a conservative acquisition and leveraging policy”, says Andris Rengitis.

The funds necessary from the investors will be called in gradually before acquiring quality real estate objects that correspond to the Fund’s strategy. First emission of the fund is EUR 20M with following emissions depending on market conditions and investor sentiment. CBL forecasts that the final size of the fund might be in the range of EUR 40–80 million leveraged. The Fund is registered as an alternative investment fund in the Republic of Latvia and is fully compliant with EU Law on Alternative Investment Funds, EU directives and regulations. The Fund is regulated by Latvian Financial and Capital Market Commission.

CBL Asset Management IPAS is a 100% Citadele Banka subsidiary. The company has been active in the investment management industry since 2002, and it offers portfolio management, fund management and state-funded and private pension plan management services.

CBL Asset Management IPAS is the third largest Latvian asset management company with total assets under management exceeding EUR 630M. It manages 15 proprietary investment funds and individual investment portfolios of more than 700 customers. The company employs 35 asset management professionals.

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