The Pallas Athena Foundations: Shifting from government bonds to real estate

The Pallas Athena Foundations were established by the National Bank of Hungary (MNB) in 2014. HUF 260 billion were allocated to the foundations by the MNB to fund educational programmes.

Initially, the capital of the six foundations was kept in government bonds, as these were deemed the “safest possible investment format”. A few months ago, Optima Investment and Property Management Plc., the asset management company of the foundations began to consider changing the form of investment from government bonds to real estate.

“We have the background and expertise to consider possibilities as far as other forms of investment are concerned. In the past years, interests to be realized on the financial markets have decreased significantly. As opposed to 5-6% a couple of years ago, the prime interest rate set by the National Bank of Hungary is 0.9%. It can be positive for the country’s economy but for us, it is a challenge to find higher-yielding investments,” says Zoltán Fekete, CEO of Optima Plc, “We are looking at the market to find quality real estate properties – primarily office buildings, commercial outlets and logistics centers. There is a consensus among analysts that this gap of interest yield between the financial markets and the real estate sector is likely to stay in the next few years but not for long and prices on the real estate market are forecast to increase. All this suggests that this is the right time to enter the real estate market,” he explains.