Baltic Horizon Fund becomes the first real estate fund to list on the Estonian market

SORAINEN advised Northern Horizon Capital in upgrading the fund management company licence of its Estonian arm to an alternative investment fund manager (AIFM) licence and in establishing a new public evergreen closed-ended real estate fund. The Estonian Financial Supervision Authority (EFSA) granted the AIFM licence and registered the fund, named Baltic Horizon Fund (Fund), on 23 May 2016.

Northern Horizon Capital is a real estate investment manager with activities in the Nordic countries, Germany, the Baltics, Poland and Russia. The AIFM license allows Northern Horizon Capital, for example, to manage alternative investment funds with assets under management exceeding EUR 100 million (in the case of unleveraged funds, exceeding EUR 500 million) and to ‘passport’ its services throughout the EU on the basis of a single authorisation.

In parallel, SORAINEN advised Northern Horizon Capital in arranging a public offering, and subsequent listing, of units of the Fund, and also in the merger process of the Fund with another closed-ended real estate investment fund managed by Northern Horizon Capital, Baltic Opportunity Fund. The capital raising and merger were completed simultaneously to allow trading in the units of the restructured fund to start promptly on 6 July 2016. The units were marketed to retail and professional investors in Sweden, to professional investors in certain other European countries under the AIFM Directive regime, and to other types of investor under exemptions available in specific countries where units were marketed. EFSA registered the prospectus for the public offering on 6 June 2016, while the merger was already approved on 23 May 2016 together with establishment of the Fund.

SORAINEN advised the client throughout the process, including in drafting AIFM internal rules and guidelines, the rules of the contractual fund, the merger decisions and documentation, the prospectus, the listing application, and in discussions and negotiations with the EFSA, Nasdaq Tallinn and the Estonian Central Securities Depositary. The SORAINEN pan-Baltic team assisting the client consisted of partner Reimo Hammerberg, senior associates Gerd Laub, Jane Eespõld and Daiva Liubomirskienė, associates Kristina Promet, Kadi Sink, Mârtinš Rudzîtis and Karina Kuizinaitė and others.