Location of Investments

Czech Republic

The Fund will start operating in Prague, Czech Republic, with a view towards investing in other Czech cities and Slovakia very soon after. Prague now has a well developed property market and business environment, while still offering many opportunities for high returns.

Like the rest of Central Europe, the Czech Republic is home to a rich legacy of architectural treasures from the Gothic period, through Baroque, up to Art Nouveau. The ravages of World War II and the architecturally and economically damaging Soviet period left most of the country's building stock in poor and decaying condition. Much of this was left in the hands of municipal authorities, which had little experience in effective management or development. The advent of capitalism in the early 90's brought in many interested investors and developers.

However, inadequate Soviet era property laws, an immature judicial system, and a primitive financial sector discouraged substantial investment, and many early projects collapsed in a flurry of headlines about financial fraud.

Despite these immense challenges, during the past decade, the city of Prague has undergone a breathtaking facelift. Old and decaying structures in the historical centre - and, more recently, beyond the centre - have been restored and rejuvenated - brought back to financial life and aesthetic charm. While interest has focused on the capitol, more aggressive firms are beginning to look beyond Prague to the nation's other major cities.

Despite many significant changes that have already taken place, the real estate market in the Czech Republic has a way to go to reach the maturity level of Western European markets. EU accession in May 2004 has fueled an increase prices and demand expected to last well into the long-run, especially in popular areas as the capitol. Although pre-EU accession speculation heightened prices on many high-end Prague properties, many good investment opportunities remain. Our Fund strives to find these often hidden opportunities and act on them with greater speed and discipline than other buyers in the market.

Slovakia

Slovakia is predicted to develop very rapidly after EU Accession, and has been making genuine efforts to catch up with its neighbours, in part by implementing some of the most aggressive and attractive tax reforms of the entire EU. Rapid growth and high returns are therefore predicted for Slovakia in the coming years. Bratislava is now seen to be a safe place to invest and the business environment has proven stable enough to attract significant increases in direct foreign investment to the extent that Slovakia is now Europe's largest auto producer.