CapMan establishes EUR835m real estate fund; buys 39 properties and hotels

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CapMan has held a first close of CapMan Hotel RE Ky, a real estate fund, on EUR835m. The hard-cap for the vehicle is set at EUR1.1bn. A total 17 Finnish institutions have committed EUR292m of equity, with the remaining comprised of senior debt. The fund is open for additional investors for a further 12 months and the maximum equity capital is set to EUR400m. The vehicle will start to generate carried interest when investors have regained their investment and a preferred annual return of 8%, after which the division of cash flow will be 80% for investors and 20% for the CapMan management company. After the annual return to investors has exceeded 10%, the division of the funds cash flows will be 70% for investors and 30% for the management company. CapMan's share of the possible carried interest from the vehicle is 60%.

The fund has signed an agreement with Northern European Properties Ltd to acquire 39 of its properties for EUR805m. The transaction is expected to close by 29 February 2008.

CapMan Real Estate has also signed an agreement with Holiday Club Resorts Oy for the development of four spa hotel projects in the Nordic region in the coming years. The planned resorts are located at Himos and Saimaa in Finland and Vastervik and Oresund in Sweden.