CapMan establishes its first project-specific hotel fund

CapMan Press release 22 November 2010 3.00 p.m.

CapMan establishes its first project-specific hotel fund

CapMan has established its first project-specific hotel fund: CapMan Yrjönkatu 17 Ky. The size of the fund is EUR 13 million, and the fund will invest in a hotel property located at Yrjönkatu 17 in central Helsinki. CapMan intends setting up 5-10 project-specific hotel funds, each of which will invest in between one to four hotels, over the next five years. The combined capital of these funds is expected to total between EUR 100 million and EUR 150 million.

CapMan's first project-specific hotel fund is dedicated to a property located at Yrjönkatu 17 in the centre of Helsinki that is currently rented by Scandic Hotels Oy (Hotel Marski).

"By introducing this new type of fund model, we will be able to offer investors a flexible investment opportunity, as investment targets are known to investors already during the fundraising process," says Mika Matikainen, Deputy Head of CapMan Real Estate.

CapMan intends setting up 5-10 project-specific hotel funds over the next five years. These will primarily invest in limited service hotels in central locations in Greater Helsinki and other growth centres in Finland. The plan is to invest in both existing properties and hotels that are still at the planning stage.

All the funds will be structured and operated in the same way. The funds' investment capacity will typically comprise 40% equity, while 60% will be debt-financing. The funds will be managed by CapMan PHS GP Oy, which is 80%-owned by CapMan Plc and 20%-owned by Corintium Oy.

CapMan will commit to investing 2% of the equity of each of the new project-specific hotel funds. The management fee will be approximately 1% of the investment at cost. If the fund transfers into carry in the future, the division of the fund's cash flows will be 80% to investors, 10% to CapMan Plc and 10% to the investment team responsible for each fund's investment activities and the other owner of the management company, Corintium Oy.

The establishment of CapMan Yrjönkatu 17 Ky will not have a substantial impact on CapMan's result for 2010.

Further information:
Pirjo Ojanperä, Head of CapMan Real Estate Hotel Fund, tel. +358 (0)207 207 642 or +358 (0)50 388 3306
Mika Matikainen, Deputy Head of CapMan Real Estate, tel. +358 (0)207 207 616 or +358 (0)40 519 0707

CapMan is one of the leading alternative asset managers in the Nordic countries and Russia and manages private equity funds with approximately EUR 3.6 billion in total capital. CapMan has six investment areas (CapMan Buyout, CapMan Technology, CapMan Life Science, CapMan Russia, CapMan Public Market and CapMan Real Estate), and each of them has a dedicated team and funds. Altogether CapMan employs approximately 150 people in Helsinki, Stockholm, Copenhagen, Oslo, Moscow and Luxembourg. CapMan was established in 1989 and its B shares are listed on the Helsinki Stock Exchange since 2001.

Corintium Oy
Corintium Oy, owned by Jukka Iivari, M.Sc. (Econ.), is a consulting firm with18 years of experience in institutional real estate markets in the Helsinki metropolitan area.

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