INVL Asset Management, one of Lithuania’s leading asset management companies, has established the INVL Alternative Investment Fund designated for retail investors, with investments starting at EUR 5000. The new fund will focus, through investments in other investment funds, on alternative asset classes and physical assets such as real estate, land and forests, infrastructure, renewable energy and private equity. This is the first INVL fund that gives retail investors the opportunity to invest in alternative asset classes. The fund’s operation has been approved by the Bank of Lithuania.
Attention to clients’ needs
“We are constantly looking for new investment opportunities that meet the needs of our clients. We set ourselves the goal of creating an attractive and understandable investment vehicle for clients who want to protect themselves from inflation and earn a return over the long term but cannot make a big initial investment. Client surveys show that the capital markets are still hard to understand for most Lithuanians and investments in physical assets seem much more dependable. Meanwhile, funds investing in alternative asset classes and tangible assets are often accessible only to informed investors able to invest at least EUR 125,000, thus excluding smaller clients. We want more people in Lithuania to be able to put their savings to work properly and in that way to help them ensure their future financial security and well-being,” says Laura Križinauskienė, the CEO of INVL Asset Management.
She says the launching a fund like this is an important step in opening up investment solutions to a wider audience. In developing this product, INVL wanted to take clients’ specific expectations into account, so it conducted a survey* of some of its existing clients. It turned out that 60% of clients would be interested in the chance to invest in an investment mix that balances risk and expected return. Half of respondents (50%) would seek a return of at least 8%, and 64% of respondents would choose investments with a length of up to 10 years.
A chance to invest in alternative asset classes with smaller amounts
Inflation in Lithuania is currently high and the best way to protect the value of one’s money is to invest it. For people with somewhat smaller savings, there were not many options: they could choose life insurance, pension funds or mutual funds that mainly invest in stocks and bonds on public markets.
Alongside the public market investment funds available to retail investors, INVL is introducing a product that is accessible to many more people interested in investing and provides an opportunity for those who have save up smaller amounts to diversify their investments: clients of INVL will be able to invest in real assets via collective investment undertakings with a minimum amount of EUR 5,000.
“By selecting the best-suited alternative investments and forming a mix of them from different asset classes and funds, we reduce the investment portfolio’s risk. The investors themselves, having relatively small amounts available for investing, could not diversify their own investments, since the minimum investment in one alternative fund is usually too large for them,” says Vaidotas Rūkas, INVL’s Chief Investment Officer.
According to him, investors see the alternative investment class as an attractive solution for diversifying an existing investment portfolio, since they show greater stability when markets are volatile, with hopes for a good risk-return ratio. Also important is physical assets’ trait of maintaining value in times of inflation. Hence a combination of alternative investments is a good choice that more and more professional investors are turning to.
The launch of the INVL Alternative Investment Fund coincides with the start of its initial offering, which will continue for up to six months. In Lithuania, INVL Asset Management and the brokerage firm INVL Finasta are distributing the fund’s units, with a minimum investment amount of EUR 5,000 and no fixed upper limit. The total term of the fund is 10 years (with extension for another 2 years possible). The target average annual rate of return is 8%.
About INVL Asset Management
INVL Asset Management, one of the leading asset management companies in Lithuania, is part of the Invalda INVL Group. The group’s companies manage pension and mutual funds, individual portfolios, private equity and other alternative investments. More than 250,000 clients in Lithuania and Latvia, as well as international investors, have entrusted the group’s companies with the management of more than EUR 1.5 billion in assets. Invalda INVL, operating since 1991, has 30 years of solid experience in managing private equity assets and building leading market players in their respective fields in the Baltic states and the CEE region.
* Survey of INVL Asset Management clients conducted in July 2021 with 577 respondents.
Contact person for further information:
Vaidotas Rūkas, Chief Investment Officer at INVL Asset Management,
E-mail [email protected]