Investors have been through a difficult period characterized by plummeting share prices, suffering real estate markets and a general meltdown of financial markets. The global financial crisis struck hard in 2008, and an economic slowdown has followed in its wake. In the midst of the pessimistic news stream, there are positive opportunities to grasp, though.
The value of Nordic listed real estate companies dropped by two thirds over the last twelve months, and sound cash-generating properties have suffered in the nose-dive of the markets. As investors have defaulted on their loans, properties have been taken over by financial institutions with limited capabilities of and interest in administrating them.
Furthermore, the impact of the current recession has paved the way for a downward pressure on rental levels resulting in a further decrease of property prices. These fundamental changes in the market situation bring forth great investment opportunities for long term investors who know what to look for.
BPT therefore launches BPT Nordic Opportunity a fund that will seize the opportunities and reap the benefits that arise from the current crisis. BPT Nordic Opportunity will focus on acquisition of real estate stocks, which are traded at considerable discounts compared to the underlying portfolio values, and properties sold by investors who are forced out of the market at low price levels.
In addition to these asset classes, BPT Nordic Opportunity will buy out diversified debt portfolios from financial institutions that attempt to strengthen their balance sheets and minimize their exposure to real estate lending by off-loading distressed debts.
"The flexibility to invest in real estate assets through listed real estate companies, the debt market and directly held properties provide an optimal climate that allows investors to explore the best opportunities and to extract the best returns across the segments. We have taken the best of three worlds: equities, debt and real estate and combined them into one unique product that will allow us to adapt to the market's development in order to always be where attractive yields can be obtained," explains founder of BPT, Lars Ohnemus.
Drawing on BPT's core competencies, BPT Nordic Opportunity is expected to generate annual returns of 15-20% over the next four years by investing across the three segments. The timing of acquisitions is crucial, and BPT's in-depth knowledge of the Nordic markets is an essential element of the strategic considerations behind the launch of the BPT Nordic Opportunity fund.
"Based on the time lags between the value creations in different segments, the right shifts will allow for enhancement of the total return making BPT Nordic Opportunity one of the most promising products on the market offering both scope and flexibility," says Lars Ohnemus.
Source: Baltic Property Trust