Eaton Vance Management, an American investment company with partial to majority ownership of several Icelandic companies, is now setting its sites on Iceland’s rental market.
Fréttablaðið reports that investors at a shareholders meeting for Heimavellir, Iceland’s largest rental company, were informed that Heimavellir is negotiating a 3 billion ISK loan agreement with a fund managed by Eaton Vance Management. This same fund will also provide around 300 million ISK in new shares, with the investment made through financial brokers Fossar Markets hf.
Eaton Vance has put a lot of money in Iceland over the years, and has even taken legal action to be able to do so.
Capital controls were put in place in Iceland in the wake of the 2008 financial crash. These controls were gradually lifted, but controls on investor-level money to and from the country persisted. Eaton Vance fought hard against these controls.
On December 20 of 2016, the company was part of an action filed against the EFTA Surveillance Authority before EFTA Court. This action argued in part that these capital controls were discriminatory. Kevin Roberts, a lawyer representing both Eaton Vance and Autonomy Capital LP, told Bloomberg at the time, “The idea that Iceland’s Central Bank can continue to pay one rate for foreign investors, and another rate for Icelandic investors, and somehow claim that this action is not discriminatory is absurd.”
The following March, Iceland announced it would lift the last remaining capital controls. Eaton Vance’s activity in Iceland then began to pick up the pace. They bought up shares in the insurance company VÍS, becoming the second biggest shareholder of that company last June, and bought shares in both the real estate company Reitir, the retail company Hagar, and bought a 10% stake in Icelandic telecom Síminn. Eaton Vance also owns billions of ISK in government bonds, most of it offshore.
The trend in many, if not most, of these investments is that Eaton Vance tends to strengthen its position, buying larger shares of these companies, often via other funds that Eaton Vance manages. These include Global Opportunities Portfolio, PF Global Absolute Return Fund, and Global Macro Absolute Return Advantage Portfolio.