Lighthouse Asset Management, an investment management company licensed by the Central Bank of Lithuania, has established their first investment fund called the Lighthouse Alternative Fund, which will offer mezzanine financing for the development of real estate projects. The fund managers revealed that they will first focus on financing projects in the Klaipėda Region.
“Currently, there is plenty of money in the finance system, yet the banks have tightened the funding conditions. As a result, many projects cannot be developed. Our first fund for informed investors should fill in the gap between the level of risk that is tolerated by banks and the ability of the developers to invest part of their equity,” said Šarūnas Butkus, Head of Lighthouse Asset Management.
The Lighthouse Alternative Fund offers mezzanine financing for the development of real estate projects. The fund is aiming to attract up to EUR 25 million in capital, with a targeted annual return starting from 20%. The founders of the fund believe the greatest potential for investments lies in the creation of the infrastructures required for service centres and office building projects that meet international standards. According to Š. Butkus, at a time when office spaces in Vilnius and Kaunas are growing at a record speed, the Klaipėda office market is stagnating, which is limiting the options for companies interested in business opportunities in Klaipėda.
According to Š. Butkus, defining specific investment goals was one of the most important incentives when establishing the first licensed investment management company in Klaipėda.
The Blue Breakthrough Strategy, approved by Klaipėda Municipality together with Klaipėda University, Klaipėda FEZ Management Company, Association of Klaipėda Industrialists and the Klaipėda Chamber of Commerce, Industry and Crafts is meant to be fulfilled by 2030. In this strategy, which will open up new opportunities for investors in the port city, Klaipėda’s future growth is associated with the development of advanced industries and services.
“The implementation of this strategy will require a large investment, but local businesses must also take partial responsibility for the growth of their city. Today, many Klaipėda entrepreneurs are investing in Vilnius or Kaunas, where the market activity is higher. However, Klaipėda and the coastal region are also rich in investment opportunities that are remaining untapped due to a lack of capital and the current approach of the banks regarding financing,” noted Š. Butkus.
He sees the greatest potential in the development of innovation infrastructure and ecosystem. The company led by Š. Butkus has established the private capital science and innovation valley Baltic Tech Park in Klaipėda that is currently expanding and is set to receive EUR 12-13 million in investments. In the future, the developers are planning to set up a network of tech parks in all the port cities of the Baltic Region. By cooperating, they will promote the growth of the entire region. It is hoped that the fund, which will finance this regional project, will attract EUR 150 million.
Opportunities to invest in the Lithuanian coastal region and attract capital to Klaipėda County were presented at a conference organised by Lighthouse Asset Management on Thursday. The speakers shared their insights on the mezzanine financing opportunities in the real estate market, as well as alternative sources of business financing, prospects for crowdfunding, venture capital and business angel opportunities.
About Lighthouse Asset Management
The owner and an investor is Šarūnas Butkus, who has been investing in Klaipėda for over 10 years. The company is managed together with Synergy Finance, one of the first licensed investment management companies in Lithuania.