Author: Merito Administrator

Update No. 20
September 2026

This edition focuses on real estate: what the portfolio has actually returned, how the live projects are set up, and a new way to hold the strategy. It covers Merito’s first exit and the capital that has come back to investors, why Riga’s new-build segment still has not repriced with the rest of the market, and Real Estate Feeder Fund I.

It has been two and a half years since Merito Partners closed its first real estate fund. In that time the strategy set out in Newsletter No. 18 has moved from thesis to distributions. Four funds have returned investor capital in full, each within 16 to 24 months of inception, the first profit has been paid out, and the portfolio now runs to more than 1,000 apartments across fourteen funds.

Kalēju 18/20 was the first fund and it is the first to return profit. Seventeen units in Riga’s Old Town, bought as a single lot for €2.9 million against a valuation of roughly €4.5 million if sold unit by unit. The work was everything in between: separate the units, fix them, design, renovate, furnish, operate, build a track record, sell. €1.0 million of profit has now been distributed to the nine investors in the fund: a realised 30% IRR and 1.8x on capital, against the 20–30% targeted at launch. The follow-up sale of the ground-floor units is expected to bring the IRR into the 35–40% range.

Three more funds have returned investor capital in full, each within 16 to 24 months of inception. The speed matters here as much as the multiple. Pasta 6 has returned the full €2.1 million raised in February 2024, with the exit itself still in progress. Ulmaņa gatve 2 has repaid its €2.5 million; that asset (40,000 m² of industrial space on a 6.5-hectare leasehold) is carried materially above acquisition cost and is now in strategic review, where we are weighing a hold against a sale. A fourth fund returned capital with a small positive return after the transaction was terminated by the seller (confidentiality obligations prevent us from naming it or going further). A fifth is contracted to return 100% of capital in Q4 2026, fourteen months after inception.

The portfolio as it stands

Fourteen real estate funds have been launched since December 2023. More than €28 million has been raised across them, over €11 million has been distributed back, and the projects in the portfolio carry a combined sales value of roughly €120 million.

Who is behind it

Around 100 investors have made over 240 separate commitments to Merito real estate funds: an average of close to three funds each, at an average commitment of around €115,000. Roughly half have backed a single fund so far; at the other end, a core group of five has backed nine or more. That pattern matters more to us than the headline number. It means the portfolio grows mostly because people who have invested with us come back for the next one, and it is why a raise can close in days rather than months.

The portfolio deliberately spans four different kinds of work rather than one: building new residential from the ground up; converting historic and Soviet-era buildings to modern residential use; buying stranded assets and selling them down unit by unit; and adding value to industrial property. That mix means we are never dependent on a single exit route or a single type of buyer, and it lets us be selective about which assets we back.

The case for Riga has not changed since we set it out in Newsletter No. 18. Apartment prices in Vilnius rose 11.1% in the twelve months to April 2026 and 12.1% across Lithuania’s largest cities, on the Ober-Haus index. Tallinn has been the slowest of the three capitals — new-build prices there have barely moved in two years and transaction volumes are still close to their lowest in over a decade — and that matters less than where it stalled: a new apartment in Tallinn still averages around €4,200 per m², against roughly €2,600–2,850 in Riga’s primary market. Even standing still, Tallinn is priced about 50% above Riga. Latvian housing prices overall moved at around 11%, but new-build prices rose only 4–5%: Latvia’s statistics bureau recorded new-dwelling prices up just 1.2% year on year in Q2 2025 against 8.3% for existing dwellings, and the pattern has held. The segment we actually operate in has not repriced with the rest of the market. And because Vilnius is compounding from a higher base while Tallinn simply sits on one, the absolute gap in euro per square metre between Riga and both peers has widened rather than closed.

Demand underneath that is real and financeable. Latvijas Banka reported household lending up 10.6% year on year at the end of June 2026, with mortgage lending up 9.5% and new housing loans running at about €120 million a month through the first half. Total domestic credit still stands at only 31.8% of GDP against a euro area average of around 73%, so the room to grow is structural rather than cyclical. That growth has continued through a turn in the rate cycle (the ECB moved rates up again in September), which tells us the demand is coming from households and banks catching up on a decade of under-lending, not from cheap money.

Supply is not keeping up. The number of apartments on offer in Riga was down 24% year on year by August 2025, with stock in the largest housing estates down 26% (Arco Real Estate), and the imbalance is regional: in Vilnius, developers completed 2,787 apartments for sale in 2025 against more than 5,700 sold on the primary market (Ober-Haus). Latvia also leads the EU on overcrowded housing, well above both Lithuania and Estonia.

Three projects, three different approaches

Brīvības 138: closest to cash. A historic building on one of Riga’s main arteries, converted to around 90 apartments: the original scheme had 78 units including commercial premises, and splitting the largest apartments lifted the count. Construction is well advanced, roughly two-thirds of the apartments are reserved and signing of the purchase agreements started in July. The value here comes from execution speed: the product is nearly finished and the buyers are already committed, so this is the shortest path to distributions of the three. Targeting 20–30% IRR annualy.

Fiziķu nams (Krīvu 11): changing what a building is for. A former scientific facility that nobody in the market had a use for, becoming 117 apartments. Demolition and clean-up are complete and the fund is fully subscribed at €2.5 million. The value comes from the conversion itself: we bought a building priced for its old purpose and are giving it a new one, which is the least competitive way to buy square metres in this city. Targeting 25–40% IRR annyally: the widest range of the three, because a conversion of this kind carries the widest spread of outcomes.

Hospitāļu 49 (Skanstehof): the new-build furthest along. Ground-up construction rather than conversion, and the most advanced of our new-build projects: the building is roughly half built and about a quarter of the 33 apartments are already reserved. The value here comes from building at a cost set before the current market and selling into it: a straightforward development margin, with none of the permitting or heritage risk the conversions carry. Targeting 17–25% IRR annualy.

Different entry logic, different duration, different risk, to fit different investor preferences, with the same discipline underneath each one.

How fast this moves

The clearest signal we get is how quickly investors commit. We announced the Valdemāra 55 fund (Club Central Residence III, Phase 1) on a Wednesday. Within roughly thirty hours the fifteen investors needed had confirmed the full amount, and we closed the raise and told everyone else the project was no longer available. Final commitments came to €1,655,000 against a €1.6 million target. That is a good problem, but it is still a problem: if you are not on the list early, you miss projects.

Every project described above sits in its own single-asset fund: one building, one vehicle, one decision. But it puts real work on the investor. You have to pick, keep picking, and be available when a raise opens and closes inside two days.

Real Estate Feeder Fund I is our answer for investors who want exposure to the Merito real estate portfolio through a single investment. One commitment is spread across up to ten of our single-asset funds, at between 5% and 25% per fund, so no single asset can dominate the outcome. Minimum commitment is €500,000 and total commitments are capped at €5 million. The fund targets a net IRR of 15–30%, generated at the level of the underlying funds.

Two points matter commercially. There are no additional management or performance fees at the feeder level, so there is no double layer of cost between you and the assets. And Merito co-invests alongside investors in every underlying fund, as we always have. Reporting and distributions come quarterly, direct to your account, with no vehicles or paperwork for you to administer.

Full terms are set out in the Feeder Fund materials, which we share on request.

Looking Ahead

A word on scale. Bonava, the largest residential developer in Latvia, sold around 2,100 apartments in Riga between 2020 and 2024 and had 367 units on the market in spring 2025, against YIT’s 168, both figures from the same market compilation by Invego, reported by ERR in April 2025. Our 1,000+ is a pipeline rather than completed sales, so it is not a like-for-like comparison, but it does put us in the same conversation as the largest developers working in this city, and we are one of very few doing it with locally raised capital.

So we intend to be more visible from here. The projects we buy are sourced off-market, and the more people who know what we look for, the more of them come to us firs

The pipeline supports it. We expect to bring at least one new project to investors every second month, and current visibility points to more. Beyond real estate, the wider Merito portfolio has been busy: BESS across the solar portfolio, fintech, and healthcare consolidation, and we will cover those in the next edition.

– The Merito Partners Team

Update No.19
June 2026

This newsletter arrives at a significant milestone for Merito. After eighteen months of work — due diligence, negotiation, structuring, and closing — we have completed Merito’s largest private equity buy-out to date. The acquisition of Livlande Agro, the most efficient pig farming group in the Baltics, closed in June 2026. It is the most complex transaction we have executed, and it marks a new chapter for Merito Partners.

This transaction does not change what Merito is — it confirms it. We have always focused on succession-driven situations in the Baltic region, where ownership transitions create windows that are too short for most institutional capital to act on. Livlande is exactly that: a sector-leading business, built and run by its founder, now entering its next phase with Merito as the strategic partner.

At the end of 2024, we started looking seriously at the Livlande Agro brand. By June 2026, we had closed. Eighteen months of work on what we internally called Project Truffle – culminating in one of the largest local capital buy-outs in Latvia in recent years.

The deal sits squarely in the kind of situation Merito was built for: a founder-led business with a 29-year track record, institutional-quality operations, and a succession dynamic that created a window of opportunity. NCH Capital and the original Danish financial investors had been with the company for over fifteen years. They were ready to exit, while the founding CEO, Alex Rasmussen, was not going anywhere – he wanted the business to continue growing with new partners and increase his stake in the business.

What is Livlande?

Livlande is the second-largest pig farming group in Latvia, with approximately 20% of the domestic market. It operates four farms – two near Cēsis, two near Bauska – producing over 100,000 finisher pigs per year. The business is vertically integrated: it grows a significant share of its own feed on 1,414 hectares of owned arable land and over 400 hectares of leased land, generates solar energy on-site, and uses pig manure as fertilizer in a closed-loop system.

The numbers are straightforward. Revenue of €17.1 million in 2025. Normalized EBITDA of €5.4 million. An equity ratio of 88%. The business has never posted a loss in its history, and since 2022, it has distributed more than €14.5 million through dividends and share capital reductions to its shareholders and an additional €4.8m to debt providers.

What makes Livlande exceptional is not the scale – it is the efficiency. Compared to Latvian and British benchmarks, Livlande produces more piglets per sow, has lower post-weaning mortality, and uses less feed per kilogram of pig weight. At identical facility and market conditions, that efficiency advantage translates to approximately €1.4 million more in EBITDA per year versus the industry average. That edge has been built over decades and is impossible to replicate for newer and smaller players.

While pork is the most consumed meat in the Baltics and Latvia, we experience a significant production deficit (~50% imported meat) and as a result all the major local players, including Gaižēni are systemic companies with very strong entry barriers.

The Baltic pig farming market is consolidating. Industrial-scale farms with 500+ sows have held their position, while small farms have closed down. The top five players in Latvia already control 60–70% of the market. Livlande is positioned to continue gaining share — both organically and through acquisition.

The deal structure

Total enterprise value was financed by €9 million of equity, €11m of bonds, and several million euros of deferred payments. Merito and co-investors contributed €9.1 million in equity. A private placement of €11.0 million in senior secured bonds – arranged by Signet Bank, secured against the farms and land at a conservative 51% LTV – was oversubscribed and provided the debt component. The founding CEO rolled over his stake and increased his shareholding to approximately 12.5% while also participating as a bond investor. Further payments to the sellers are based on future performance, structured to provide significant downside protection for equity holders.

The bonds carry a coupon of 7.5%, paid quarterly, with a 3.5 year maturity. Listing on Nasdaq Riga First North is planned within twelve months. Bond investors benefit from first-ranking pledges on both the real estate and the operating company shares.

Livlande has all permits in place to expand capacity organically by approximately 20% in an industry where new permits are a key barrier to entry. Additionally, there are a handful of meaningful acquisition targets in the Latvian pig farming market, several of which have active succession situations in the near term. There are also energy-side opportunities we will evaluate as part of a longer-term strategy.

The foundations are solid – the business has been consistently maintained and the farms are in good operational order. We will build on that and pursue the opportunities above more actively than the previous ownership structure allowed.

We have said since the beginning that Merito targets situations where a transition in ownership – not a macro bet, not a sector dynamic – creates the investment opportunity. Livlande is the clearest example of that thesis working at scale.

Alex Rasmussen founded the business in 1997. He built it from a greenfield project, scaled it through Danish private investment and later institutional capital from NCH, and took it to market leadership. After 15+ years, the institutional shareholders wanted liquidity. Alex wanted continuity and growth capital. The resulting window — a motivated seller combined with a highly capable management team that is staying put — is exactly what we look for.

Pan-Baltic: what comes after Livlande

The next transaction is already in progress – and the pipeline beyond it is taking shape. We are looking at several sizeable businesses, some with Pan-Baltic footprints, some national sector leaders. What unites them is the same angle that brought us to Livlande: a succession situation in the broadest sense. That can mean a founding generation ready to hand over the keys, institutional investors who have held a position for ten or fifteen years and need a credible exit path, or ownership structures that have simply outgrown their original purpose. In all cases, the business itself is sound; what is missing is the right next owner. We think that is where Merito fits.

We will share details as soon as the process allows. For now, we would simply note: if Livlande confirmed our ability to execute a private equity buy-out in Latvia, the next step is to demonstrate that the same approach works at Pan-Baltic scale.

Looking Ahead

Q2 2026 has been the most active quarter in Merito’s history — and the pipeline going into the summer suggests that pace is not slowing down. The Livlande buy-out was the headline, but it was far from the only thing in motion. We are working in parallel on several significant transactions and initiatives: BESS (battery energy storage solutions) across our solar portfolio, new real estate special situations, a feeder fund for Mintos growth case and a healthcare consolidation play.

A lot has been done. A lot has been set in motion. Summer will be busy.

For our current investors, thank you for the trust you placed in us – in some cases before we had a track record in this type of transaction. For those following from the sidelines: our door is open.

📧  investor.relations@meritopartners.com

🌐  Click Here To Invest

— The Merito Partners Team

Update No.18
March 2026

This edition focuses on real estate – specifically, what Merito Partners has built, what the numbers look like, and where the strategy is heading next. It covers why Riga is the right market, what the portfolio has delivered in less than 30 months of execution, and Arhitektu nams – the most ambitious project yet and a preview of where this strategy is heading.

It has been just over two years since Merito Partners closed its first real estate fund. In that time, the strategy laid out in Newsletter No. 15 has moved from thesis to track record – and the results are giving every reason to accelerate.

Three things are covered here. First, why Riga is the right market – and why the window is not permanent. Second, what the portfolio has delivered in less than 30 months of execution. And finally, Arhitektu nams – the most ambitious project yet, and a signal of what comes next.

Walk through central Riga on a weekday morning and you will see something increasingly rare in a European capital: buildings worth restoring, priced as if nobody wants them. We think quite a lot of people will want them soon.

A decade of caution left Latvia behind

The 2008 financial crisis hit Latvia harder than almost any other European economy. Property prices collapsed by more than 50%. Households spent years paying down debt rather than taking on new mortgages. Banks tightened standards. Developers stayed on the sidelines. It was a rational response to a genuine shock – but it created a structural gap that persists today.

That gap is most visible in Latvia’s mortgage market. As of Q3 2025, outstanding mortgages and real estate loans in Latvia stood at roughly €8.4 billion – a fraction of Lithuania’s €14.6 billion and Estonia’s €12.8 billion. Traditionally, the vast majority of mortgages are concentrated in capital cities with comparable populations and income trajectories, presenting a major opportunity for Riga. Outstanding loans to real estate and construction tells the same story: €2.4 billion in Latvia, versus €4.5 billion in Lithuania and €5.6 billion in Estonia (Source: CBL AM calculations based on data from Central Banks of the Baltic States Q3 2025).

This is not weakness – it is latent demand. A population that has historically underinvested in homeownership, in a market where the conditions for doing so are now improving rapidly. As Latvian banks increase their appetite for real estate lending the pool of mortgage-eligible buyers expands. More buyers, same supply constraints. Supply, incidentally, is not rushing to catch up. New apartments entering the Riga market fell short of 2,200 units in 2025. The Colliers Latvia Residential Report 2025 projects roughly 2,500 units for 2026, rising to 3,000 in 2027 – enough to absorb demand at current pace, but not enough to rebuild the inventory buffer that the market has been drawing down (Source: Colliers Latvia Residential Report 2025).

The price gap that cannot last

Which brings us to the number that matters most for investors analysing the return potential. New project apartments in Tallinn average: €4,370 per square metre. Vilnius: €4,050. Riga: €2,950. A 30–40% discount for a city with comparable history, urban quality, income level and professional workforce (Source: CBL AM, Market Outlook 2026).

That gap is not explained by demand – Riga’s primary market recorded 2,186 registered transactions in 2025, up 38% from 2024, generating a record €310 million in total deal value (Source: Colliers Latvia 2025). It is not explained by construction quality – the same developers active in whole Baltics are building in Riga. It is explained by the post-crisis undersupply, the recovering mortgage market, and the lag in developer confidence – all three of which are now visibly reversing.

When Colliers surveyed the active pipeline heading into 2026, developers who had been sitting on the sidelines through 2022 and 2023 were announcing large-scale projects and expanding land banks. Developers do not do that if they expect prices to fall.

For repositioning projects with 24–36 month horizons, the combination of low entry prices, expanding buyer pools, and a closing valuation gap creates a return profile that is difficult to replicate in markets that have already re-rated. That is the environment in which our real estate strategy operates – and that is why we are moving now.

We said in Newsletter No. 15 that Merito Real Estate Special Situations would run on two principles: partnering with agile developers who put their own capital at risk alongside ours, and targeting repositioning of undervalued or mismanaged assets that the market has mispriced. The question was always whether execution would match the thesis. We can now answer that.

The two approaches in a nutshell

1st Approach: Partner with developers who co-invest 15–35% of capital, accept an investor-first return structure, and operate under a Shareholder Agreement with Merito as an appointed Management Board member. The developer brings execution skill. We bring disciplined capital and governance. Interests are aligned from day one.

2nd Approach: Find properties that are undervalued, mismanaged, or simply underused – and reposition them through a focused 24–36 month strategy. Not speculative development. Not long holding periods waiting for macro tailwinds. Active value creation: acquire, renovate, convert, exit.

These are not abstract principles. Every fund in our portfolio – from the first closing in late 2023 to the latest one in 2026 – has been structured around one or both of them.

Where we started, and where we are

December 2023. Merito closes its first real estate fund – Kalēju 18/20, a property in Riga’s Old Town – with nine investors and €1.3 million in committed capital. At the time, we had no track record in real estate. What we had was a thesis, a team with deep local market knowledge, and the discipline to structure every deal with investor protection first.

By February 2024, we had closed a second fund – Pasta Street 6. By the second half of 2025, we were running six new funds in parallel, covering projects from Brīvības Street 138 to Skanstes Hof. Today, across ten funds, approximately 80 investors have made nearly 180 individual investment commitments, totalling close to €20 million.

Pausa Nams

Brīvības 138

Fiziķu Nams

Skanstehof

Matīsa 27

The pace has not been accidental. Each new fund has benefited from the lessons of the previous one – better deal structuring, due diligence, tighter governance, more experienced counterparties.

The results that matter most

Pasta Street 6 is the clearest proof of concept so far. Acquired in February 2024 for a total investment of approximately €5 million including bank debt, the property’s market value had reached 2.0x Equity Multiple by June 2025 – a period of roughly sixteen months. All investor equity is already fully repaid and exit planning is underway. Expected returns in the range 20–30% IRR per annum. It was income-generating within 14 months of acquisition.

2025: The year execution became visible

2025 was the year the Merito real estate strategy moved from something investors trusted on paper to something they could see working in practice. Six new funds launched. Four of them under the developer-partnership model, two under the repositioning model.

The deals covered a range of property types – a former scientific facility on Krīvu Street, a historic residential block on Brīvības Street, a residential development project on Ģertrūdes Street, a new residential development at Hospitāļu Street in partnership with InCity Capital. Each project different. Each structured the same way.

Every now and then, a project comes along that does not just fit your strategy – it defines it. Arhitektu nams is that project for Merito Real Estate.

The building at Skolas Street 21 has stood in the Quiet Centre of Riga since 1987. Designed to house the Design Institute, it was built with the kind of structural generosity that Soviet-era public commissions occasionally produced: a reinforced concrete frame that has outlasted its original purpose by decades, high ceilings, wide corridors, and five elevators – a genuine rarity in buildings of this era and scale. It covers over 9,000 square metres. And until recently, it was sitting largely underused, its potential invisible to most of the market.

We acquired it for €5.9 million, co-financed with AS Signet Bank contributing €3.85 million. The total investment in the project is expected to surpass €14 million by completion.

What we are building

The transformation plan is straightforward in concept, demanding in execution: convert the building into approximately 250 compact studio and one-bedroom apartments, sized between 17 and 35 square metres, designed for the people who actually want to live in central Riga – students, young professionals, expats, long-term visitors. People for whom location matters more than space, and for whom the alternative is usually an ageing Soviet-era flat in a suburb, or an overpriced modern unit in a building that lacks character.

The Quiet Centre location is not incidental. Skolas Street 21 sits within walking distance of all key cultural and historical landmarks in central Riga and the established professional quarter of central Riga. It is, by any reasonable measure, a prime address – and it has been priced like it is not.

Beyond apartments, the plan incorporates commercial ground-floor space, co-working and recreational areas, storage solutions, and dedicated bicycle parking. These are not afterthoughts. They are the features that make a building genuinely liveable for the target demographic, and that drive long-term occupancy and rental income.

The numbers

The environmental case is worth emphasising. Renovation of an existing concrete frame produces roughly half the carbon footprint of a comparable new construction. In a market increasingly attuned to sustainability credentials – and where EU green standards for residential buildings are tightening – this is not just an ethical argument. It is a commercial one.

A template, not a one-off

What makes Arhitektu nams significant is not just the scale – though at over 9,000 square metres and €14 million in total investment, it is the most ambitious project to date. What makes it significant is what it demonstrates: that Merito can identify, structure, and execute a project of this complexity with the same discipline applied to a €1.5 million single-building fund.

Work is already underway on another project that will exceed Arhitektu nams in scale. It is not ready to be announced yet – but it will be soon. What can be said is that investor appetite has been the clearest signal that this strategy is working. Across the portfolio, the total value of RE assets has reached €80 million, and plans already call for more than 600 new apartments across all projects.

The pipeline is not slowing down. It is accelerating. And we want our investors to be part of what comes next.

Interested in our next opportunity?

If the strategy we have described in this newsletter resonates with you – or if you are an existing investor curious about upcoming projects – we would be glad to talk.

📧  investor.relations@meritopartners.com

🌐  Click Here To Invest

— The Merito Partners Team