How did you meet your partners? When did the foundations of Mint Investments begin to take shape?
While I was working at Deutsche Bank in London, I met Radim Bajgar, who was also working there. In the London community of Czechs and Slovaks, I also got to know Vojtěch Kraus, who was working at the bank HSBC. We became very good friends, spent our free time together and talked about business.
We lived through several volatile crises in the world’s stock markets, such as the dotcom bubble, the Asian crisis, the Russian, Brazilian, and Argentinian financial crises – all the stock and bond ups and downs. And so we together agreed that it would be nice to go into something more stable, where short-term fluctuations in the underlying asset would not be so marked. I have the feeling that it was Radim who came up with the idea to give real estate funds a try. At that time, this concept did not exist in the Czech Republic or Slovakia. I remember us sitting on my balcony and coming up with the first name of our company “CEC Capital”.
So you set a clear goal together right at the beginning. What helped you to bring it to fruition?
Again, an opportunity arose because Česká spořitelna was considering investing a spare €100 million. And that’s when we came to them with the idea of setting up a real estate fund. It took two years to implement, as even the Czech National Bank was not familiar with the concept of a real estate fund until then. Thus, Česká spořitelna was the first to come up with a real estate fund. Its name was the Czech and Slovak Property Fund, and it was founded in 2002.
We were not yet known in the real estate market, but we were lucky. Radim had an acquaintance at the Financial Times who contacted him with an interest in writing an article about our activities. It was read by a senior manager at GE Capital in Boston, Mr Kenneth Munkacy. He contacted us and we managed to create the joint venture Czech and Slovak Investment Advisors with GE Capital. Subsequently, Česká spořitelna chose us as the exclusive trustee and asset manager of its first real estate fund – Czech and Slovak Property Fund B.V.. At that time, Sebastien Dejanovski was working for GE Capital Golub, but later came to join our firm as the fourth partner.
We started managing the money of Česká spořitelna – later joined by its sister company Slovenská sporiteľňa – and gradually also the funds of the largest European and North American institutional investors, as well as leading Czech and Slovak private investors. Over the past 5 years, the Mint Group has concluded transactions totalling more than €1 billion.
In addition to asset and property management, we are also involved in the development of commercial and residential real estate, in Slovakia, for example, we built the Jégého Alej residential project and the Laugaricio shopping centre in Trenčín. Currently, we have under construction the Metropolis residential project with 300 apartments in Bratislava’s Old Town quarter. We provide tailor-made services to our clients looking for opportunities to add value and increase the value of their investment, while taking care to minimise risk. A specific example is streamlined rental, bringing added value to the project’s tenants, and reducing operating and environmental costs, which includes the latest technologies.
Do you also invest your own equity in these projects?
When we identify an investment opportunity for our clients, we, as Mint, usually enter the project with our own capital. We are either approached by domestic or foreign institutions wishing to invest in high-quality real estate, or we find an interesting real estate project and, after a thorough analysis, present an investment memorandum to our client, where we describe the current situation and suggest how we would be able to raise the real estate’s value over, let’s say, five years. The client then decides whether they are interested in investing, and in what volume. Each investment opportunity is different, but it always relates to real estate investment.
What are you most involved in at Mint right now?
We are working very intensively on the Mint residential fund, which we would like to expand to Slovakia over time. To date, the fund has invested in residential projects in Brno, Prague, and Pilsen, which are intended for long-term rental. These are apartment buildings that from the very start have been designed and built to meet the most demanding requirements for residential rental. The fund has been operating for over two years and the net asset value as of August 31 amounted to over 1.1 billion CZK. We have appreciated our investors’ funds by more than 21%.
How does it work? Who can be an investor?
The fund is intended for the general public. It is open to the smallest savers, students, pensioners – anyone. We have an investment company approved by the Czech National Bank, so the client can buy a share in the fund with a minimum investment of one thousand Czech koruna. It is a flexible and highly liquid investment; the client can decide to sell their share at any time and have their money on account within a month.
In downtown Bratislava, Mint is implementing its own residential project – Metropolis. How do you view it? What makes it special for you?
I have a personal relationship with Metropolis not only because it is our project, but also because it is located in my hometown. I am glad that Bratislava will be enriched with this interesting and unique architecture. I consider myself a Bratislavan in body and soul, and so I naturally care about how the city develops and how people live here. I am thrilled that we are bringing a project that has the highest standards in the locality, attractive design, and at the same time an efficient layout of apartments, where every square metre is fully utilised.
I heartily recommend Metropolis to all my friends; it is suitable for families with children, as well as for those whose children have already left the nest, because it is a fantastic location, and offers the highest comfort of living. Metropolis will be a place for real, stress-free living, with everything you need nearby.
Since I am also physically present on the construction site, I can see how we are building and to what quality. I attend inspection days, communicate with our project team and general contractor, as well as other partners. I am making sure that everything goes like clockwork.
So you are a sort of guardian angel for Metropolis. How are your competencies divided at Mint? What helps you function in business and privately?
My area is rentals and property management, and since I am the only Mint partner physically located in Bratislava, I also take care of things related to the Metropolis project. Sebastien Dejanovski and Radim Bajgar deal with new expansions and development, Vojtěch Kraus is a specialist in law and finance. And the last one to join us, coming from the position of CEO of JLL for the Czech Republic and Slovakia, is Lukáš Schirl, and who is now heading asset management at Mint.
We work well together because we respect each other and there is a healthy chemistry between us. We have all adopted common goals that we have defined as a company. Each of us is a quite different personality and this diversity enriches us together.
To what do you owe your joint success?
The greatest things have come about because of our friendship stretching back over 20 years. We were also lucky that we started working and doing business at a time when everything was just getting started in Slovakia and the Czech Republic. Each of us had spent time abroad and each previously worked for a top firm, so we each brought a wealth of experience.
We are fair to our clients. For example, now a number of developers in Slovakia have reflected increased construction costs in the prices of new-build apartments, and are introducing inflation clauses into contracts, something which we don’t think is fair. Times today are quite uncertain enough without the additional worry of potential increases to prices that have already been contractually agreed. We have not introduced and certainly are not planning to introduce any inflation clauses in our projects in the future. Metropolis will be a fixed point, a beacon, an investment that people can rely on.
Another rule of ours is that we never promise what we don’t trust 100% ourselves. We always put only what we believe in an investment memorandum, based on thorough and professional analysis, and as a sign of our trust we put our own money in. We have the advantage of long-term knowledge of the market in which we operate, thanks to which we can be flexible.
Do you manage to relax a little in addition to all your responsibilities? If so, how?
Sport. When my son got older, I started devoting more time to myself. What I enjoy most is swimming in the lake, trail running in the forest, cycling, kayaking, cross-country skiing, Alpine skiing, and walking in the countryside.
I also make sure my son plays sport. Movement, especially in the fresh air, makes us happy and gives me tremendous energy.