Interview with Peter Brožek from Arca Capital Group.
Arca Capital is a dynamic, privately held investment group that has since its inception in 1999 progressively developed into a well-recognized player in the CEE region with activities in private equity as well as regulated financial services.
Arca Capital Group currently has assets in excess of EUR 1.4Bn. We really invest in fixed assets that generate cash flows, and with a business model that is easy to present and easy to understand for practically anyone.
Nova Green Energy Fund
Nova Green Energy Fund is a fund that invests in photovoltaic and other green energy producing assets. This is the business that Arca Capital has been doing historically. The business model is rather simple.
There is EU wide policy supporting alternative sources of energy. Photovoltaics, or green energies, has become bigger than the coal or traditional sources of energy such as fossil fuels in Europe. All the solar panels have become much more efficient, that today it makes even more sense to consider these investments.
We have traditionally invested in Slovakia and the Czech Republic. This is where we are focusing now.
We have pipeline assets that we are going to add to the fund. We are adding bio-based assets; bio-mass and bio-gas. They provide a nice and stable performance factor and diversification factor within the fund. In other words, you are not fully exposed to photovoltaic, but you also have a bio-based generation of power that you can sell to the market.
The performance of the fund has been very stable. We started with performance in excess of 7%. Then two years ago, we even had performance in excess of 8%.
Nova Real Estate Fund
The Nova Real Estate Fund is a fund that has so far invested in commercial assets in the Czech Republic only.
Our philosophy is very simple. We focus on top quality real estate with top quality tenants. While Prague is known for tourism and many other things, our assets, our real estate assets are known for having tenants such as Porsche, Pfizer or Google.
Everything that we do basically is built around high quality tenants, so we have office space investments in Prague, in the capital. We have commercial shopping park investments in regional hubs in the Czech Republic.
In total, we have seven investments in the fund so far. In terms of assets, it is in excess of EUR 140Mn.
We have a pipeline of assets that we have already acquired, and we are hoping to add this to the fund before the year-end.
One of the key things that we have to use in the market is speed of execution. The funds are not built to be able to execute transactions swiftly, so what we do is that we acquire assets into our private equity, so to speak. Then, we put it into the fund. Only speed of execution is something that is so relevant for us to be able to capture these opportunities as they arise.
Low risk and stable returns
Simply stated we are as if an analogy to fix income in a way, because our funds are performing as if they were fixed income instruments. They have stable performance, because they are not associated with the volatility. The underlying performance is given by the quality of cash flow that these assets generate. This is a summary of what Arca Capital does.