Partner Article

Investing for the future – why Swedish property ticks all the boxes

Investing for the future – why Swedish property ticks all the boxes

Nigel Evans, Farmer and Founder Director of Evanridge Properties

Latest figures reveal that an increasingly high proportion of busy, high net worth professionals have made little or no provision for their retirement. Professionals in their 40s are least likely to have made any financial plans.

Nigel Evans, Farmer and Director of Evanridge Properties explains how he diversified from dairy farming to fund management to prepare for his own retirement.

From farming to property

In the summer of 2005, my business partner Bill Ridge and I were both Pembrokeshire dairy farmers. Along with our accountant Huw Evans, we were considering how best to secure our financial futures. We wanted to build up capital and future earning capacity for our retirement. While many farms and businesses might be valuable assets, this does not always translate into steady cashflow and capital growth, and we were looking to develop additional income streams and asset growth.

We started off by looking at investment opportunities in a broad range of European countries. We shortlisted several potential investments, flying from Cardiff to various countries, before identifying the Swedish property market as having the strongest potential, where market conditions have been consistently favourable in spite of the economic downturn. Why Sweden? We found that the Swedish market has been much more predictable than other economies. Rents are set by local authorities and being inflation-linked, they give investors year-on-year solid, transparent and reliable returns. There is also a huge rental market in Sweden, 65% of the population lives in a rented or communally owned property and there is a significant under supply of rental accommodation.

We set about building up local knowledge and strong relationships with local banks, authorities and property experts on the ground. In January 2006 we started out investing our own money and over 8 years have attracted investors and grown the portfolio to a value of £35 million. Over time, we have developed strong relationships with local banks to access very favourable terms for well-structured property acquisitions. Evanridge now has a full time Swedish property management team in place, managing its growing portfolio of properties and identifying further investment opportunities.

The majority of our properties are in and around Sweden’s second largest city Gothenburg, including the commuter towns of Trollhättan, Uddevalla, Vargön and Vänersborg. Aside from being very beautiful, Gothenburg has huge potential and a strong infrastructure. The properties are primarily residential buy-to-let, with a small amount of commercial property forming part of the mix.

Do your research

Two of us were over 50 when we started the business and it’s been one of the best decisions we have ever made. We would advise anyone looking to do a similar venture to rely on common sense and do their homework. We did a huge amount of research and investigation, before we felt comfortable that we had made the right choices. We strongly believe that people can take control of their own financial plans, provided they are prepared to do the groundwork, visit the country, view the properties and talk to other investors.

When we set out, we were looking for tangible investments, generating strong, consistent returns, so it made sense to invest in bricks and mortar, in one of the most reliable economies in Europe. We regularly take current and prospective investors over to Sweden so that they can meet the team and literally kick the foundations of the properties they own.

We spend a lot of time talking to our investors, 95% of whom come from ‘word of mouth’. People usually invest with us for at least 7 years and the fund requires a minimum investment of £25,000 so this is a longer term commitment. All three of us place great emphasis on the relationships we have built up with investors and our understanding of what each of them is trying to achieve. Ultimately we are investors ourselves and our aim is to treat everyone as we would wished to be treated, so as well as being honest and straightforward, we are transparent, accessible, and definitely don’t do ‘hard sell’!

At Evanridge we have always been about taking control of our own financial futures. Value defines everything we do. We don’t want to waste anybody’s money, our own or our investors. So we have a small, efficient and well run organisation and a passion for buying investments that represent value for money.

It’s been really gratifying to have bucked the economic trend to deliver consistently impressive returns that compare very favourably with other investment vehicles on offer. And we have relished the joint challenges of fund managing and farming: we see our Swedish properties very much like ‘vertical farms’ – it’s essentially the same business model as contract farming, identifying a strong asset and working it, to improve the yield.

This was posted in Bdaily's Members' News section by Evanridge .