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Evli Residential II

Evli Residential II is a residential development fund with a high return target. The fund is actively involved in the entire construction value chain until it is disentationded. The apartments have been attractive as investments and have offered historically stable returns. The aim of the Fund is to act responsibly in the field of the environment, administration and social responsibility.

Overview
Responsibility

Fund overview

Apartments are liquid and defensive investments

Over the past 20 years, apartments have returned over 8% p.a. (KTI). At the same time, they are also considered to be a low risk and liquid real estate asset class.

Location of sites in growth centers

The fund invests in the Helsinki region and  growth centers (focus Tampere and Turku) and selectively in the municipalities surrounding them. The micro location is selected to maximize utilization and rental yield over the long term.

The fund's own real estate development raises the return target

The fund's return target is over 10% p.a. (IRR). Own real estate development offers a clearly higher return expectations compared to conventional residential investment.

Efficient use of capital and a strong project pipeline

The fund’s aims to do investments in a fast pace and its term is 6 years. The goal is to build a residential portfolio of rented apartments of over EUR 300 million during this period, and to liquidate the development margin and portfolio premium quickly after completion.

Independent management of the entire value chain

Although a significant portion of the return is based on development carried out by the fund, professional rental activity (local knowledge and monitoring of the rental market) and optimization of operating costs also increase cash flow (and the values of apartments) during the term of the fund.

Highly experienced portfolio management with strong track record

Our experienced residential portfolio management team already has experience of several successful residential development funds. Evli's earlier EAI residential I Ky fund has produced a strong net return, making it one of the best-performing residential funds in Finland.

 

NB! This product is intended for professional investors and a limited number of non-professional clients who make an investment of at least € 100,000 and who are considered to have an adequate understanding of the fund and its investment activities.

The scenarios presented herein are estimates based on historical data on the performance of similar investments, as well as current market conditions, and they are not exact indicators. Actual results will vary, depending on the market development during the fund term.

Suitable for investors:

  • who wants access to fund's own real estate development, which offers a much higher return expectation compared to conventional residential investment
  • who wants to invest in a real estate asset class that have returned over +8% a year over the past 20 years
  • who accepts that the investment has poor liquidity and hence weak opportunities for exit. Investors must be prepared for their subscribed assets to be tied-up for 6 years and, in special circumstances, possibly even longer
  • for professional investors and a limited number of non-professional clients who are considered to have an adequate understanding of the fund and its investment activities

This page provides general product information and is marketing communication. Historical returns are no guarantee of future returns. The value of an investment may rise and fall and the investor may lose some or all of the capital invested. The contents of this website should not be considered as investment advice and should not be relied upon in making an investment decision. Before making an investment decision, please consult the fund's legal documents, such as the key investor document. The information is available to those considering an investment from Evli.

Sustainability-related disclosures

Financial product’s sustainability information in accordance with EU Sustainable Finance Disclosure Regulation (SFDR) 2019/2088 (sustainability‐related disclosures in the financial services sector). This is a financial product in accordance with Article 8 of the SFDR.

Publication date: December 5, 2022
Legal Entity Identifier: 3245928-9 (business identity code)

This financial product promotes environmental or social characteristics, but its objective is not to make sustainable investments.

The fund promotes environmental and social characteristics in accordance with Evli’s Principles for Responsible Investment, responsible investment principles for real estate funds, Climate Change Principles and climate targets, and requires that target companies follow good governance practices.

In the investment process the portfolio management assesses the development project from an ESG (Environmental, Social, Governance) perspective as part of the overall investment decision. If a significant and unresolved ESG issue is revealed in the assessment, there will be no investment.

The fund promotes climate change mitigation. As the fund participates in the development of real estate sites, it is able to have an influence on environmentally responsible building solutions already at the planning stage. The energy solutions focus on geothermal heat, solar collectors and more efficient heat recovery. Many investments in energy efficiency are also financially sensible in terms of life-cycle costs. In material selection, we focus on low-emission solutions. During the investment period of housing companies, the fund aims to promote environmental characteristics through its own actions and decisions, for example by trying to achieve greater energy efficiency by the real estate. In addition, space solutions at the planning stage and the fund’s own actions and decisions during the investment period are intended to improve the comfort and communality of the investments. Evli’s goal is to achieve carbon neutrality by 2050 at the latest, and it has set an interim target of a 50 percent reduction in indirect emissions from all investments by 2030, provided that this is possible in the investment environment. The comparison year is 2019. The fund-specific share of the emission reduction target may vary between funds.

The portfolio management team actively monitors target properties, for example their energy and water consumption and tenant satisfaction, and it also regularly visits the properties. Evli’s real estate funds have several stakeholders. The portfolio management team cooperates with various stakeholders in order to gain an understanding of which ESG matters are important to them and develop the quality of the properties and to support the energy efficiency targets. Evli’s real estate funds only deal with trusted partners and tenants. The fund aims to invest only in ‘A’ energy rated sites. In addition, all sites are compliant with nearly zero-emission building (NZEB) requirements.

As the fund is involved in the development of real estate, it has better opportunities to influence selected building-specific solutions than it would if it were buying completed real estate. Furthermore, as the fund participates in the development of real estate sites, it is able to have an influence on environmentally responsible building solutions already at the planning stage. Evli’s Principles of Responsible Investment and fund-specific responsibility principles set the framework for Evli’s engagement and conduct in the event of perceived breaches of norms.

The housing companies constructed by the fund are managed in accordance with the principles of good governance and taking stakeholders into account. Also during the construction period, partners are expected to exercise good governance, compliance with which is a prerequisite of cooperation. An assessment of the quality of corporate governance is an important part of the assessment of potential investments.

All active investments of the fund promote environmental and social characteristics. The proportion of ‘A’ energy rated sites in the portfolio, the energy consumption of sites, the indicators of principal adverse sustainability impacts associated with real estate investments (exposure to fossil fuel-related risk in real estate assets and exposure to risk related to energy-inefficient real estate assets) and carbon intensity are used as indicators to measure the realization of the environmental or social characteristics promoted by the fund. The fund collects data on sustainability indicators that are relevant to the promotion of its environmental and social characteristics. The data is not verified by a third party and the completeness of the data is reported at the same time. The completeness of the data does not affect compliance with the above principles.

This financial product promotes environmental or social characteristics, but its objective is not to make sustainable investments.

The fund promotes environmental and social characteristics in accordance with Evli’s Principles for Responsible Investment, responsible investment principles for real estate funds, Climate Change Principles and climate targets, and requires that target companies follow good governance practices.

In the investment process the portfolio management assesses the development project from an ESG (Environmental, Social, Governance) perspective as part of the overall investment decision. If a significant and unresolved ESG issue is revealed in the assessment, there will be no investment. As the fund is involved in the development of real estate, it has better opportunities to influence selected building-specific solutions than it would if it were buying completed real estate.

The fund promotes climate change mitigation. As the fund participates in the development of real estate sites, it is able to have an influence on environmentally responsible building solutions already at the planning stage. The energy solutions focus on geothermal heat, solar collectors and more efficient heat recovery. Many investments in energy efficiency are also financially sensible in terms of life-cycle costs. In material selection, we focus on low-emission solutions. During the investment period of housing companies, the fund aims to promote environmental characteristics through its own actions and decisions, for example by trying to achieve greater energy efficiency by the real estate. In addition, space solutions at the planning stage and the fund’s own actions and decisions during the investment period are intended to improve the comfort and communality of the investments. Evli’s goal is to achieve carbon neutrality by 2050 at the latest, and it has set an interim target of a 50 percent reduction in indirect emissions from all investments by 2030, provided that this is possible in the investment environment. The comparison year is 2019. The fund-specific share of the emission reduction target may vary between funds.

The portfolio management team actively monitors target properties, for example their energy and water consumption and tenant satisfaction, and it also regularly visits the properties. Evli’s real estate funds have several stakeholders. The portfolio management team cooperates with various stakeholders in order to gain an understanding of which ESG matters are important to them and develop the quality of the properties and to support the energy efficiency targets.

As a part of the Evli Fund Management Company, real estate funds have committed to complying with Evli’s Principles for Responsible Investment. In addition to complying with Evli’s Principles for Responsible Investment, the fund complies with the real estate funds’ own responsible investment principles.

Evli’s real estate funds only deal with trusted partners and tenants. The fund aims to invest only in ‘A’ energy rated sites. In addition, all sites are compliant with nearly zero-emission building (NZEB) requirements.

The housing companies constructed by the fund are managed in accordance with the principles of good governance and taking stakeholders into account. Also during the construction period, partners are expected to exercise good governance, compliance with which is a prerequisite of cooperation. An assessment of the quality of corporate governance is an important part of the assessment of potential investments.

All active investments of the fund promote environmental and social characteristics.

The proportion of ‘A’ energy rated sites in the portfolio, the energy consumption of sites, the indicators of principal adverse sustainability impacts associated with real estate investments (exposure to fossil fuel-related risk in real estate assets and exposure to risk related to energy-inefficient real estate assets) and carbon intensity are used as indicators to measure the realization of the environmental or social characteristics promoted by the fund.

The environmental and social characteristics promoted by the financial product are monitored and reported using the sustainability indicators mentioned above.

In the investment process the portfolio manager assesses the development project from an ESG perspective as part of the overall investment decision. The fund collects data on sustainability indicators that are relevant to the promotion of its environmental and social characteristics. The data is not verified by a third party and the completeness of the data is reported at the same time.

The achievement of the promoted environmental and social characteristics is reported annually through the sustainability indicators mentioned above, in conjunction with which the completeness of the data is also reported. All active investments of the fund promote environmental and social characteristics by observing Evli’s Principles for Responsible Investment and fund-specific responsibility principles. The completeness of the data does not affect compliance with the above principles.

In the investment process the portfolio manager assesses the development project from an ESG perspective as part of the overall investment decision. If a significant and unresolved ESG issue is revealed in the assessment, there will be no investment. As the fund is involved in the development of real estate, it has better opportunities to influence selected building-specific solutions than it would if it were buying completed real estate. Furthermore, as the fund participates in the development of real estate sites, it is able to have an influence on environmentally responsible building solutions already at the planning stage. The portfolio management team actively monitors target properties, and it also regularly visits to them. The portfolio management team cooperates with various stakeholders in order to gain an understanding of which ESG matters are important to them and develop the quality of the properties and to support the energy efficiency targets. The methods are based on data collected from the targets, which is not verified by a third party.

The financial product can be used to engage with the target companies as part of the promotion of environmental and social characteristics. Evli’s Principles of Responsible Investment and fund-specific responsibility principles set the framework for Evli’s engagement and conduct in the event of perceived breaches of norms.

The fund does not have a benchmark index.

Information on environmental and social characteristics of the fund in accordance with article 8 of Sustainable Disclosure Regulation (in force from January 1, 2023)

Principles for responsible investment

Real Estate Funds Principles for Responsible Investment

Fund (AIF) Evli Residential II Ky
Phase Closed
Legal structure Finnish limited partnership, closed-end fund
Alternative investment fund manager (AIFM) Evli Fund Management Company Ltd
Geographic focus Finland
Investment instrument Residential real estate
Strategy Real estate development and rental
Operating period 6 (+3 by GP:n decision) years
Investment period 4 years (target 3 or less)
Return target Over 10% annual return (net IRR*)

The target returns are based on an estimate of the development of the investment’s value and market conditions. The realized return is influenced by the success of the investment activity and the realized market development. The set return target may not be achieved. The value of the investment may rise and fall and the investor may lose all or part of the invested capital.
Minimum commitment EUR 100 000

* internal rate of return

Fund's expenses and other supplementary information are available in the Key Investor Information Document.