Hedge fund moves into consumer electronics

  • 2008-08-27
  • By TBT Staff
TALLINN - GILD Arbitrage, the only multi-strategy hedge fund in the Baltics, has bought a minority stake in the Estonian electronics chain Enter for 2 million euros.
Enter's management says that the additional funding will enable Enter to continue expanding and growing sales in the Baltics.
The investment is a sign that it is not all bad news in the Estonian economy, as GILD is still prepared to invest despite the rising price of borrowing.
"We choose to invest in strong companies that manage well during the downturn. In the case of Enter, we see long-term growth potential," Tonno Vahk, GILD Bankers Partner and Fund Manager of GILD Arbitrage, told The Baltic Times.

 "Enter's sales grew by 2 percent in the first half of 2008, compared to the same period of last year, which makes our company one of the fastest growing retailers in Estonia. In three years, we have gained a strong position on the market and with our new investor we are ready for the next leap," Aivar Paalberg, the Head of Council of Enter IT Market AS said.
Tonno Vahk said he was confident that Enter has chosen a convincing retail strategy, which has been proven in other markets and by the previous performance of the company.
"This strategy has good chances to provide continuous growth which will survive through the temporary cooled economic climate. The company management has an outstanding track record and we believe them to continue to be very successful in this venture," he said.

Currently Enter manages 13 stores all around Estonia and an online store at www.enter.ee. The company plans to build up the chain in Estonia and start expansion into new markets.
"An important role in the expansion process is carried by the internet shop and digiDoctor services," Paalberg said.
In the second half of 2008, Enter plans to open four new stores and expand four current ones in Estonia. All new and expanded stores will host the Apple store-in-store concept, a digiDoctor service area and an enlarged home audio-video section.

Current shareholders of Enter are Estonian private persons and companies based in the Estonian capital.
Enter concentrates on providing consumers with goods based on digital technology and digiDoctor services. Enter employs more than 100 employees and its last FY sales were 11.5 million euros. The company's objective is to evolve the digital lifestyle.
GILD Arbitrage is in fact the only registered hedge fund in the Baltics.
GILD Bankers is an independent investment bank in Emerging Europe with a leading position in the Baltic countries, offering management of alternative funds, investment banking and private banking. It has offices in Estonia, Latvia, Lithuania, Ukraine, Bulgaria and the United Kingdom, Its investments extend to all emerging economies in Europe and its vicinity.

GILD Alternative Fund's team specializes in tailored and active investments. Assets under management in GILD Arbitrage, the Emerging Europe multi-strategy hedge fund, GILD Long Haul private equity funds and GILD Real Estate funds surpass 150 million euros. GILD active investment funds have provided consistent 21 to 31 percent average annual returns.
GILD Alternative Funds is a member of the Alternative Investment Management Association, a global hedge fund association that has 1,280 corporate members in 49 countries worldwide.