INVL Asset Management completes first cross-border investment fund merger

The INVL Asset Management companies in Lithuania and Latvia have combined the two Latvia-managed investment funds Finasta Obligāciju Fonds and Finasta Sabalansētais Fonds into the Finasta Emerging Europe Bond Subfund, which is managed in Lithuania. It was the first-ever merger of foreign investment funds into a fund operating in Lithuania, and was completed on 19 January 2016.

“This fund merger will let us, in managing funds, even more effectively focus on the proven bond solutions that enable us to achieve the best results for our clients. We believe the opportunity to invest money in this fund could be relevant not only for people in Lithuania and Latvia, but also in other countries,” says Tomas Krakauskas, director of the Investment Management Department at INVL Asset Management.

He notes that the Finasta Emerging Europe Bond Subfund is more liquid and has smaller management costs than the funds which were merged into it, and its past investment results are better than theirs.

INVL Asset Management’s Lithuanian unit currently distributes the Finasta Emerging Europe Bond Subfundin Lithuania, Latvia, Sweden and Germany, and has permission to do so in Finland, Norway and Denmark. The fund’s units are also listed on the Nasdaq Vilnius securities exchange.

Following the merger, the participants of the Finasta Obligāciju Fonds and the Finasta Sabalansētais Fonds became participants of the Lithuania-registered Finasta Emerging Europe Bond Subfund and hereafter invest according to the strategy of the Finasta Emerging Europe Bond Subfund. The investment units they held were converted free of charge into investment units of the Finasta Emerging Europe Bond Subfund. The two Latvian funds – Finasta Obligāciju Fonds and Finasta Sabalansētais Fonds – ceased operating after the merger. The merger of the funds was approved by the Latvian and Lithuanian supervisory institutions on 2 December 2015.

The Finasta Emerging Europe Bond Subfund, which has earned ratings from the international agencies Morningstar and Lipper Leaders, is one of four subfunds of the Finasta Umbrella Fund. After the merger, the Finasta Emerging Europe Bond Subfund has assets under management of EUR 18.2 million.

INVL Asset Management’s units operating in Lithuania and Latvia are part of Invalda INVL, one of the leading asset management groups in the Baltic countries. The group’s companies manage pension and mutual funds, alternative investments, individual portfolios, private equity and other financial instruments. More than 150,000 clients in Lithuania and Latvia, along with international investors, have entrusted them with managing over EUR 300 million of assets.