A Swedish property fund targeting a minimum annualised return of 12pc has been launched.
The fund, Evenridge Swedish Properly 2LP, is aimed at high net worth investors. Evanridge, a new fund management firm, the owners of which have more than 20 years property investment experience, hope to raise a minimum of £10m in the first fund raising, which closes on April 5.
The minimum investment is £50,000 of which advisers can receive 3pc commission and 0.5pc trail payments.
The fund will be geared, allowing it to buy property up to £50m on the back of £10m capital.
It will invest in commercial and residential property, though chiefly the latter.
The first fund set up by Evanridge has achieved a return of more than 32pc in less than a year. The company cautioned investors against expecting the same return, which is it said was exceptional. However, it said the 12pc target, net of fees and expenses was a minimum figure. Nigel Evans, partner in Evanridge, said the fund had been able to borrow at around 4.5pc, over six years - the expected life of the fund - against an average yield on the Swedish property market of 7.5pc, making an immediate 3pc a year gain before capital appreciation and property selection were factored in.
"The Swedish property market represents an excellent low risk investment opportunity as a result of a strongly performing economy which, combined with recently introduced reductions in personal taxation, supports increasing levels of disposable income per capital and growing property values."
"In addition, Sweden has a shortage of rental property and a large rental market with limited development activity. This, combined with low vacancy and tenant turnover rates, provides secure, inflation adjusted income flows."
The fund does not produce income and will provide a capital return when it is would up, which Evanridge hopes to achieve through selling the portfolio to institutional investors or private deals.