Former Aig Chief Executive, Letterstone To Launch 1b Euro European Property Venture

Starr International, the company owned by former chief executive of American Insurance Group (AIG) Hank Greenberg, and London-based fund manager Letterstone Group would launch a one billion euro Eastern European property fund, the Financial Times reported.

Netherlands-registered LS Real Estate Ventures would be used to buy developments in Hungary, Slovakia, Romania and Ukraine, the daily said.

The two partners will pour 250 million euro in the venture, with the bigger chunk coming from Starr International, and the rest of the funds will come from bank loans. The fund will target returns of over 20 per cent.

It will look primarily for land or property that can be re-developed, targeting bigger cities and "growth locations in second-tier cities," the FT reported.

“[Letterstone] are able to utilise their own on-the-ground operations in the countries where they are investing to source deals which offer excellent value,” Greenberg said, as quoted by the daily.

No exit strategy has been fixed, with stock market flotation or outright sale to be considered, Letterstone chief executive Simon Hill said.

Eastern Europe has experienced a smaller decrease in property prices than the western part of the continent and with the deficit of commercial property, as well as the high number of project under development that are up for sale, the region remains a big draw for real estate investors.propertywisebulgaria.com