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Charlemagne closes southeast Europe fund

The London listed investment firm is to float the European Convergence Development Company on the Alternative Investment Market in 2007 despite signs that investor appetite has waned.

Charlemagne Capital has closed its new specialist private equity property fund after raising €30 million ($38 million) via a private placement.

The European Convergence Development Company will list on the Alternative Investment Market (AIM) in London in 2007, the company also revealed today.

The seven-year fund will invest alongside partners in real estate projects primarily in Bulgaria, Romania and Turkey, in the office, retail, and residential sectors.

The projects will have a two- to three-year life span before they will be sold.

The European Convergence Development Company is the second private equity real estate firm that Charlemagne has launched. The first was the European Convergence Property Company, which floated in 2005 and raised €60 million.

Chief executive Jayne Sutcliffe said Bulgaria, Romania and Turkey were fast growing property markets in the run-up to EU succession. The company hopes to benefit from high yields and the potential for rising capital values.

Charlemagne is a specialist emerging markets equity investment management group that itself floated on AIM in April. Financial entrepreneur Jim Mellon owned a third of the shares in the company until it was listed.

In the first six months of the year Charlemagne has been hit by volatility in emerging markets and the company has lost a third of funds under management since going public.

The group was spun out of Hong Kong-based Regent Pacific Group in 2000.