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Finland's Varma, Etera set up logistics fund with Sponda

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FINLAND - Two pension insurers have committed capital to a €170m three-way logistics and industrial fund set up by Finnish property firm Sponda.

Varma, which has a 10.27% shareholding in Sponda, and Etera will between them initially own 62% of the Sponda Fund III, with Sponda holding the remaining 38%.

It was unclear whether the partners would invite other investors into the club-style fund.

The partners will seed the fund with a portfolio of assets sold to the fund by its shareholders for €90m.

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In a statement, Sponda chief executive Kari Inkinen said the sale of Sponda assets worth €32.5m to the fund would "help us achieve a planned reduction in the share of logistics properties in [our] property portfolio while also financing our investments".

The investment could mark a departure for Varma, which early last year began slowing down its domestic real estate investment after a period of intense activity, citing an overwhelming influx of foreign capital in the market.

The Finnish market last year accounted for transactions worth €1.8bn, though it saw a drop in the second half of the year.

Etera is one of four investors, excluding Sponda, in Russian Invest, a vehicle set up by Sponda last September targeting development projects in Moscow and St Petersburg.

Ilmarinen, the cross-sector pension fund with a €3.2bn real estate portfolio - and a 9.5% shareholder in Sponda - was another.

In addition to Varma and Ilmarinen, pension fund shareholders in Sponda include the state pension fund of Finland (VER), Yleisradio pension fund and the Norwegian Government Pension Fund Global.

The fund launch this week comes as part of Sponda's strategy to expand its property fund management business.

It already manages two logistics funds and a third invested in office and retail. It has minority holdings in all three funds.

According to its most recently published data, the firm's existing funds had €600m in assets under management.

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