Baltic Horizon Fund (further “BH”) is a regulated closed-end contractual investment fund registered in Estonia on 23 May 2016.
Following a successful capital raising (IPO) Baltic Horizon merged with Baltic Opportunity Fund on 30 June 2016. Baltic Horizon is the remaining entity which took over 5 assets of BOF and its investor base. Trading of Baltic Horizon units on Nasdaq Tallinn Stock Exchange began on 6 July, 2016. In total approx. 42 mln of fund units were listed on the exchange.
The Fund is a public fund with no particular lifetime (evergreen). Units of the Fund are made available to the public in accordance with the Fund rules and applicable laws. Please refer to registered and approved by the FSA Fund Rules of Baltic Horizon Fund.
Northern Horizon Capital AS is the Management Company (AIFM) of the Fund. Both the Fund and the Management Company are supervised by Estonian Financial Supervisory Authority. Northern Horizon Capital AS is part of Northern Horizon group headquartered in Copenhagen Denmark.
Northern Horizon Capital, the Management Company of the Fund is an experienced investment manager focusing on specialized real asset investment strategies in Northern Europe. The Management Company is the result of a merger in 2011 between BPT Asset Management and Evli Property Investments.
Structure and Governance
BH is a tax transparent and cost efficient vehicle. Management fee is linked to the market capitalization of the tradable units. It is also imbedded in the Fund Rules that the management fee will decrease from 1,5% to as low as 0,5% from the market capitalization as Fund’s assets grow.
BH operates under the REIT concept where vast majority of Fund’s cash earnings are paid and only 20% can be reinvested.
The Fund is managed by the Management Company which is Northern Horizon Capital AS. The immediate team comprises of the Management Board and the Supervisory Board of the Management Company. The Fund also has its Supervisory Board which comprises of 3-5 independent board members.
12-15 ROE p.a.
7-9% dividend p.a.
50% leverage target.
Key Fund Facts
Baltic Horizon is the first public real estate fund listed on Nasdaq Tallinn exchange. Fund units were admitted to trading on 6 July 2016.
Baltic Horizon Fund units are also listed on Nasdaq Stockholm. The first trading day on Nasdaq Stockholm was on 23 December 2016. This was the first time when a security listed on Nasdaq Tallinn was dual-listed on Nasdaq Stockholm. Baltic Horizon is also the first AIF on the alternative investment funds list of Nasdaq Stockholm.
Baltic Horizon is managed by Northern Horizon Capital AS, a subsidiary of Northern Horizon group. Northern Horizon Capital AS is a licensed AIFM and is supervised by Estonian FSA.
Baltic Opportunity Fund (BOF)
Baltic Opportunity Fund (BOF) launched in 2010 is a predecessor of Baltic Horizon Fund. Following a successful capital raising Baltic Horizon merged with Baltic Opportunity Fund (BOF) on 30 June 2016. Baltic Horizon is the remaining entity which took over 5 assets of BOF and its investor base. Post-merger BOF Fund ceased to exist. Historical information of BOF Fund incl. its NAV, financial reports, news and other information can be found here.
Risk management is essential part of our business. The Management Board considers that a key factor of AIFM’s ability to create sustainable value is the risk that AIFM is willing to take and its ability to manage then effectively. Many risks exist in the Fund’s operating environment and continuously emerge on a daily basis. Risk management function activities do not aim to eliminate them except operational risks. The risk management and compliance functions instead focus on ensuring that these risks are known and are addressed through risk management process. All operative risks shall be minimized and only those business risks which are reasonably quantifiable and manageable will be taken. More on our risk management process can be found in the Fund Rules.
The Fund and the Management Company operate under the laws of Estonia and any disputes regarding rights and obligations under the Fund Rules and regarding the operations of the Management Company thereunder shall be resolved in the courts of Estonia.
Baltic Horizon’s primary focus is to invest directly into commercial real estate located in Estonia, Latvia and Lithuania with a particular focus on the capitals – Tallinn, Riga and Vilnius.
The Fund will focus on established cash flow generating properties with potential to add value through active management within retail, office and logistic segments in strategic locations and strong tenants or quality tenant mix and long leases. Up to 20% of the Fund’s asset may be invested into forward funding development projects.
The Fund aims to use 50% long term leverage strategy. At no point in time may the Fund’s leverage shall exceed 65%.
The Fund aims to continuously diversify the risks geographically, across real estate segments, across tenants and debt providers.
As an international asset manager Northern Horizon Capital is dedicated to good corporate governance principles. Baltic Horizon has an independent boards and we strive to have a transparent, fair and professional dialogue with our investors.
All our investments are guided by the following principles:
- We only invest in properties where our investors can expect a steady income stream and have a good chance of a medium-term capital gain.
- We are actively focusing on minimizing and managing any potential downside risks while protecting the full upside potential of our investments.
- We will refuse any investment opportunity which challenges our integrity or is in conflict with our mission statement and core values.
- Each individual property is assessed upon acquisition as well as on an annual basis by independent valuators in compliance with the International Financial Reporting Standards (IFRS) and local valuation methods.
The main guiding document describing the principles of Baltic Horizon Fund matters including the management and governance of the Fund are Baltic Horizon Fund Rules. The Rules were approved and are monitored on a regular basis by Estonian FSA.
Baltic Horizon Fund management consists of the Management Board and the Supervisory Board of the Fund. The Management Board bears overall responsibility over daily business of Baltic Horizon Fund. The Supervisory board comprises of independent people (3 to 5 people) who are responsible for supervision of the Management Board.
Management Board is in addition supervised and adviser by Supervisory Board of the Management Company.
Additional info regarding Governance, Management Board and the Supervisory Board of the Fund can be found on Baltic Horizon Fund homepage: www.baltichorizon.com.
Baltic Horizon Fund portfolio overview and property descriptions can be found here: http://www.baltichorizon.com/portfolio/
Information regarding reports and presentations, unit information, how to invest, announcements and general meetings can be found on the Investor page on Baltic Horizon Fund website: http://www.baltichorizon.com/