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Funds Rush Into Bulgarian Property Placing
Top fund managers have piled into Bulgarian Property Developments (BPD) in a share placing to raise Ј75 million to develop several property sites in Bulgaria.New Star’s Paul Craig is one manager who has taken advantage of the share issue, taking a new 3.76% stake in his New Star Global Strategic Capital fund (New Star Global Strategic Capital). He has also taken a 2.51% position in his New Star UK Strategic Capital Growth fund (New Star UK Strategic Capital).
Craig’s colleague, AAA-rated Guy de Blonay, is also a fan of BPD (BPD) taking a fresh stake in the firm worth 1.38% for his New Star Global Financials fund (New Star Global Financial Ret).
New Star controls 10% of the Ј43 million company in total. Another retail fund with a new stake is Aurora investment trust (ARR), run by James Barstow, which holds 0.28%.
Hedge fund managers GLG Partners and Millennium Partners, also took hefty positions of 25.1% and 6% respectively following the share issue. Other investors include Moore Capital and QVT Fund.
Craig, who targets a range of capital growth products that invest in alternative asset classes such as specialist property funds and private equity, told Citywire the Bulgarian property market has been favourably compared with the Spain of 20 years ago.
He said economic growth in Bulgaria has averaged 4% over the last seven years and with the country set to join the European Union (EU) in January 2007 it will be eligible for major EU grants following accession.
He also highlighted that property prices are low relative to the rest of Europe and that multinational companies are starting to invest in Bulgaria.
Craig believes the BPD management team, which includes London property developer Ivo Hesmondhalgh and London banker Philip Pashov, who is also director of the Bulgarian stock exchange, are the best people to take advantage of the exciting climate in Bulgaria.
‘They have strong connections in the Bulgarian market with regard to land acquisition, commercial development and residential development – primarily ski resorts and property for middle classes,’ he said.