(19 April 2018) KD Funds, one of the largest and oldest asset managers in South East Europe and Peakside Capital, an international real estate investor, announce the launch of the KD Adriatic Value Fund, Special Investment Fund (the “Fund”), the first regulated real estate alternative investment fund (AIS) in Slovenia.
The new fund will leverage the unique combination of Peakside’s real estate market knowledge coupled with KD Funds’ global expertise and experience in managing institutional real estate investments offered by the two firms joining forces.
To date, the Fund has raised commitments from regional institutional investors giving it a buyingpower in excess of €50m. Investors are attracted to the opportunities offered by the region which is currently delivering economic growth well in excess of the EU average whilst near-term prospects are expected to benefit from the yield gap relative to other European real estate markets.
The Fund has already made its first acquisition, with the purchase of the Tivoli Center, an office building in Ljubljana for €13m, reflecting a net initial yield well in excess of 8%. The Class A property located in prime downtown Ljubljana provides a Gross Lettable Area (GLA) of around 8,000 sqm across two connected buildings. 97% of the space is occupied by long-term tenants with strong covenants. Current tenants include international law firms, as well as a diversity of various successful SME companies. The property offers excellent transport connections including good access to public transport links.
Luka Podlogar, the President of the Management Board of KD Funds, said: “We are pleased to have closed the first acquisition of a commercial real estate asset for our new real estate fund, proving ourselves as the pioneers of development in the real estate fund sector in Slovenia, too. By way of this venture, we are fulfilling the KD Funds’ strategy in practice, namely to expand our product range of successfully managed funds for retail investors, by adding alternative investment funds for institutions.”
Stefan Aumann, Managing Partner and Founder of Peakside Capital added: “The acquisition of Tivoli Center is an excellent start for the Adriatic Value Fund. We are very happy to have acquired a prominent building that is in demand from occupiers and is located in a prime location within the growing Ljubljana office market. This is a stepping stone in establishing a larger portfolio in the region that will offer attractive returns to the Fund’s investors.”
KD Adriatic Value Fund, Special Investment Fund, is an alternative investment fund managed by KD Funds, with Peakside Capital acting as investment advisor. Its investment objective is to generate returns for investors from rental income and capital growth through investments in real estate in Slovenia, Croatia and Serbia, with a special focus on office and retail properties. The three target countries represent a region with a relatively undeveloped real estate sector and attractive returns, whilst the long-term success of the fund is further supported by strong economic growth.
Founded in 1994, KD Funds is one of the largest and oldest asset managers in South East Europe. It manages around EUR 800 million in 34 funds and 13 investment mandates (together with its subsidiaries) across the SEE region, including the oldest mutual funds in Slovenia and Croatia.
Peakside Capital was founded in 2010 as a spin-off from the Merrill Lynch investment bank and currently employs ca. 30 people. It is mainly active in Germany and Eastern European countries, managing funds and asset management mandates. It currently has more than EUR 1 billion of gross assets under management.