WE BET ON ACHIEVING THE BEST POSSIBLE YIELD
Prague/Bratislava, 20th of May 2022
Industrial properties have a readable prospectus, thanks to which ARETE Investment Group manages to collect regular income. Robert Ides, co-founder of ARETE Group, explains why it pays to invest in these properties.
Where and when did the ARETE story begin?
How did this investment group come into being? My partner and I had our first discussions about setting up an investment group in 2013. ARETE Group was established in 2014 in Singapore, where we were able to raise our first large investors while defining our core strategy and corporate values. Along with that, the SICAV investment fund structure was legislated in the Czech Republic that year, which international investors understood and required for their investment.
What all are you currently involved in within the Group?
The ARETE Group comprises investment funds and service companies that provide specific services to the funds. Our strategy is to ensure maximum activities for the efficient management and development of our funds in-house. We do not want to be dependent on external suppliers. We consider this approach to be our competitive advantage and we are able to react immediately and flexibly in the event of any problem. The coronavirus pandemic has absolutely proved the correctness of our approach.
In what areas can a client invest with you?
We currently have one investment fund open, which is focused exclusively on investments in industrial real estate in the Czech Republic and Slovakia. We are now focusing as much as possible on the development of this fund, and the investment cycle should be reached by the end of 2027 at the latest.
What are you doing to mitigate the risk that may be associated with investing in the funds?
First and foremost, it's about the right form of underlying asset and investment strategy. Our fund buys and builds exclusively industrial real estate, which is mainly leased by logistics, manufacturing and trading companies. They use them on the basis of long-term lease agreements for the performance of their core business. This makes our properties an essential part of the landlords' business. Secondly, we build our portfolio in such a way that geographical or sectoral dependencies do not arise. The third component is maintaining a conservative level of bank financing at up to 50 percent LTV. Our competition, for example, is more than 10 percent higher. We recognise that we are losing some percentage yield, but in this way we are better able to protect investors and have a more stable portfolio even in more turbulent times. At the end of 2021, we had an LTV of 14 per cent, which is very conservative. The last point is the significant tightening of investment criteria in the acquisition appraisal of properties and tenants in terms of long-term perspective and sustainability.
What is the focus of the ARETE Industrial Sicav investment fund?
The fund's portfolio consists exclusively of premium industrial properties, and we would like to reach an asset under management of €400 million at the end of the investment cycle. This is a more than realistic target for us. We are focused on achieving the best possible return for investors. For this reason, we are building new industrial parks directly in the fund.
What are the advantages of investing in manufacturing and logistics real estate in particular?
First and foremost, it's a readable economic and financial prospectus. Contracts with tenants are concluded for a very long period of time, so there is a future cash flow that gradually flows into the fund from reputable, international companies with good ratings and is secured by a guarantee. Unlike other investments, such as in precious metals or cryptocurrencies, we do not rely on the appreciation of assets over time, but we have a very readable prospectus and collect regular income over the investment period.
How can someone become an investor in your fund?
The investment shares of our fund are distributed by the securities dealer PARTNERS INVESTMENTS and can also be subscribed by Tatra banka private banking clients. We also cooperate with some family office companies and asset managers. Potential investors can find further information on our website arete.eu.
Controlling your investment is clearly important. How does it work at ARETE?
Each investor receives a regular report once a month on the development of the value of the investment share, the values are also available on Bloomberg. A more extensive report is issued every quarter, where the investor can find all the important data on the development of the value of his investment. We regularly meet with our investors at more or less formal events that we organise. We always strive for the most transparent, open and individual approach.
What are your visions for the future?
We want to become an established European fund manager with more than one billion euros in assets under management. At the same time, we would like to continue to develop our competencies, bring innovative products and strengthen our team.