INVL launches its second alternative investment fund for retail investors

INVL Asset Management, a company of the INVL Investment Management and Life Insurance Group, has launched its second alternative investment fund for non-professional investors, with investments starting from EUR 5,000.

INVL Alternative Investment Fund II gives ordinary investors access to private alternative asset classes by investing in private companies, corporate private debt instruments and real assets such as land, forests and infrastructure.  The Fund will aim for an average annual return of at least 8%.

“The success of the INVL Alternative Investment Fund I, which we launched last year, has shown that there is a strong demand in Lithuania for such funds, where nonprofessional investors can grow their wealth. Last year such a fund attracted more than 560 investors and over EUR 5 million.

Alternative investments are carried out in private rather than public markets and are more complex and less regulated. They are relatively high-risk but can provide stability when public markets fluctuate. For example, one of the alternative asset classes – real assets – has the property of retaining their value during periods of high inflation. Investments in alternative assets are being chosen by an increasing number of professional investors both globally and in Lithuania because of the opportunity to diversify their portfolios.

However, most funds investing in alternative assets are usually only available to large institutional investors or informed investors who can spend up to EUR 125 000. INVL Alternative Investment Fund II opens this opportunity to everyone again”, – says Vaidotas Rūkas, Head of Investment Management at INVL Investment Management and Life Insurance Group.

Public opinion polls also show that more people are discovering investment funds. According to the survey on the investment, saving and retirement habits of the population conducted by Spinter for INVL in April last year, one in four (25%) of the population said that they invest. Of these, 17% choose investment funds, which is higher than the share of respondents who consider real estate or rental housing as an investment. Moreover, the number of people who invest is growing consistently year on year.

Aims to attract  EUR 5 million

“INVL Alternative Investment Fund II launches on 2 May. It is expected to attract between EUR 5 million and EUR 8 million of investment. The fund is planned to be distributed within 7 months, by 30 November, but the distribution will be suspended if the EUR 8 million is raised before then. Alternatively, the Fund may organise a second distribution round at a later date, but in any case, the value of the funds raised will not exceed EUR 8 million.

“We choose to invest in alternative assets that have the potential to grow in value and generate stable returns over the life of the Fund. We also seek a balance between risk and return by investing in assets that are normally subject to lower fluctuations in value.

We intend to allocate a third of our funds to private equity through collective investment vehicles (CIUs), investing in companies in the Baltics and worldwide. The other third will be allocated to private debt, both in the region and globally. We intend to invest the rest amount in real assets such as forests, agricultural land and infrastructure such as renewable energy – solar, wind farms and others. INVL is offering a rather unique opportunity for everyone in the market to invest in a portfolio of these asset classes,” – says V. Rūkas.

The fund will be open for 10 years, with an option to extend it for another two years. Participants will have a limited ability to withdraw from the fund early. In addition, investors wishing to acquire units in INVL Alternative Investment Fund II must not have acquired more than 50 ha of agricultural land and 150 ha of forest land.

The fund will have a distribution fee of up to 2% – the earlier the investment and the higher the amount, the lower the fee. An average annual return of 8% will be targeted, but actual investment performance may be different and the management company does not guarantee investment returns or that the fund’s performance objectives will be met. This fund has been approved by the Bank of Lithuania and will be distributed by INVL Group itself.

The first alternative investment fund is finalised

INVL Alternative Investment Fund I, launched in January 2022, is now finalizing its investments. As planned, a quarter of the fund’s assets have been allocated to INVL Sustainable Timberland and Farmland Fund II, which invests in forests and land, and INVL Renewable Energy Fund I, which invests in energy projects, and 20% has been allocated to Brookfield Strategic Real Estate Fund IV, a global fund of real estate manager Brookfield. The remaining one third comes from three private equity investments: General Atlantic, a global private equity manager, Blackpeak, investing in South East Europe, and the last planned investment, EQT, a global private equity manager.

Even during the investment period, the fund is already generating returns, with a return of 4.3% since inception. The main contributors to the positive performance were the investment in the INVL Sustainable Timberland and Farmland Fund II, which gained 10.9%, and the temporary investments in GTC bonds (4.2% gain) and the INVL Emerging Europe Bond Fund (+3.9%).

About the INVL group

INVL is the leading investment management and life insurance group in the Baltic region. Its companies manage pension and mutual funds and life insurance directions, individual portfolios, private equity, and other alternative investments. Over 300,000 clients in Lithuania, Latvia and Estonia and international investors have entrusted the group’s companies with the management of more than EUR 1.9 billion of assets. In the business for more than 30 years now, the group has solid experience in managing private equity assets and building market players that are leaders in their respective fields in the Baltic countries and Central and Eastern Europe.

Important notice:

Investments in INVL Alternative Investment Fund II (the “Fund”) is subject to the investment risks and other risks specified in the Fund’s rules and prospectus. The value of the investments may go up or down and the investor may get back less than he/she invested or even lose all the funds invested. The Fund’s management company, INVL Asset Management UAB (the “Management Company”), does not guarantee the profitability of investments.

Before making an investment decision, the investor should evaluate the Fund’s investment strategy, applicable fees, all risks associated with the investment and carefully read the Fund’s Prospectus, Rules, Key Investor Information Document and other documents for investors, which can be found on the website of the Management Company  invl.com/aif2, or can be obtained free of charge from the Management Company’s customer service points, either on his own or through the assistance of an investment advisor.

The Fund will invest the majority of its assets in other collective investment undertakings. In collective investment undertakings other than Matched Collective Investment Undertakings, including Specified Compliant Special Collective Investment Undertakings, Collective Investment Undertakings for Informed Investors and Collective Investment Undertakings other than Matched Collective Investment Undertakings, which in turn invest the majority of their assets in an alternative asset class comprising private equity, energy and infrastructure, real assets (real estate, forests, land), private debt and other alternative asset classes (hereinafter referred to as ‘Alternative CIUs’), may invest up to 100 % of their assets in the following asset classes 100 % of the Fund’s assets. At the beginning of the Fund’s operation and/or in the absence of the possibility to invest the Fund’s assets in Alternative CIUs and/or in order to manage the Fund’s liquidity risk, the Fund’s assets may be invested, subject to diversification requirements, in units of investment funds investing in debt securities and/or other money market (including deposits) or debt financial instruments (directly or through other collective investment undertakings). Preference will be given to other collective investment undertakings managed by the Management Company for the investment of the Fund’s assets.

The Fund will seek to invest in a portfolio of collective investment undertakings that seeks an average annual return of 8%. The Management Company would like to draw the attention to the fact that the actual performance of the Fund’s investments may vary and the Management Company does not guarantee the investment returns or that the Fund’s performance objectives will be achieved.

The Fund will operate as a closed-ended collective investment undertaking and therefore the investor’s right to request the redemption of its units is limited.

All the information contained herein is of a promotional and informational nature and shall not be construed as a recommendation, offer or invitation to invest in the Fund’s units or shares of Invalda INVL. The information contained herein shall not form the basis of, or form part of, any subsequent transaction.