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. Last Updated: 07/27/2016

Firms Open Fund for Real Estate

VTB Capital, Deutsche Bank and Finnish construction company SVR have started a 300 million euro ($416 million) fund for investing in real estate development projects, the new fund has announced.

Other investors into the fund include Scandinavian pension funds Ilmarinen and Etera, the press release said.

While the fund said it has already attracted 100 million euros in capital, only one of the partners has disclosed the size of its initial investment -- SVR said it made an initial layout of 20 million euros.

Taking into account future real estate assets, the value of the fund could grow to 1 billion euros, said Victor Makshantsev, VTB's chief of infrastructure investments.

The fund will invest in developers, said Makshantsev, who expects the strategy to succeed because of a fall in the price of construction materials.

In addition to commercial real estate, VTBC-DB Real Estate Partners will also invest in high-end housing, he said.

Makshantsev also said the fund was currently considering three separate sites and is planning on selling its first assets after two to three years.

Deutsche Bank's Charles Blackburn said he expects the fund to earn its first profits sometime in the next two to five years.