Tamir Fishman raising 75m euros for central Europe real estate fund

Tamir Fishman means to raise ?75 million (NIS 412 million) for a new real estate fund already founded, that will focus on eastern Europe.

The investments firm will be founding the fund together with Michael Langer, cousin of Eldad Tamir, and Amir Leibov.

Leumi & Co of the Bank Leumi (TASE: LUMI)  group will own 20% of the fund's management company, in exchange for an investment of NIS 11 million.

Based on its prospectus, the new fund will be initiating, constructing and developing properties in Hungary, Romania, the Czech Republic and Poland. It means to concentrate on high-quality housing, commercial space and vacation resorts.

The company will be financing its projects through non-recourse loans taken from local banks. It means to borrow 85% of the investments and to finance the rest using its own resources. Ergo, if it's raising about NIS 400 million, then its envisaged  scope of investment is around NIS 2 billion.

At present participation units in the new fund cost NIS 10. They are not registered for trading and won't be during its first year, though afterwards Tamir Fishman does mean to list them.

Danny Fishman explains that he didn't want to list the fund now, because it has no assets yet, only cash, and he doesn't want to it trade at a discount below its cash.

He adds that the fund will be accessible to ordinary investors, not only huge ones.

The fund will charge management fees amounting to 2% of its assets a year, which is roughly the same as peer funds charge, plus - it will be keeping 20% of profits from projects. But, Fishman vows, it won't skim that cream until investors receive their entire principal back, and will only help itself if returns are higher than 8%. 

The fund also promises to collect management fees only on equity, not on leverage.