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East Capital launches fund to acquire undervalued special situations assets

Stockholm-based East Capital has launched the East Capital Special Opportunities Fund to target investment opportunities that can be acquired at low valuations due to market- or owner-s

Stockholm-based East Capital has launched the East Capital Special Opportunities Fund to target investment opportunities that can be acquired at low valuations due to market- or owner-specific reasons.

The fund is mandated to invest in Russia and the rest of Eastern Europe.

Peter Elam Håkansson, chairman and head of portfolio management at East Capital (pictured), says: ‘Capital is scarce and opportunities to buy sound companies at low valuations only stay until market conditions have normalised. The ability to act fast, across markets and sectors is crucial to capitalise on these opportunities.’

The fund will target investments in companies with a solid operation and business outlook, which due to market or owner specific reasons can be acquired at low valuation levels.

East Capital will target investments with both a clear trigger for revaluation and exit opportunity within four years. The strategy implies that East Capital will, when appropriate, take a more active role in the company through board representation or other means.

Investment focus will be listed, or otherwise traded, equity securities, but other financial instruments can also be used. Distributions to investors can be made throughout the life time of the fund. All proceeds from divestments after three years will be distributed to the investors.

The board of directors of East Capital Explorer has decided to invest EUR35m in the fund upon its expected launch during the second quarter of this year. The fund will target institutional and other qualified investors and the maximum fund size is limited to USD100m. The fund term is four years.

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