Collins Stewart Fund Management is to launch a closed-ended Eastern European property fund later this year. While the group has not confirmed who will manage the portfolio, Fund Strategy understands that former Legg Mason chief investment officer Keiran Gallagher is to run a property fund on behalf of Collins Stewart.The new fund will invest in commercial, industrial and residential property, mainly located in Istanbul (Turkey), Bulgaria and Kiev (Ukraine). Collins Stewart director Stephen Coxshall says that a high-profile fund manager with an equity background, including experience of managing Eastern European assets, has agreed to run the portfolio. Coxshall says: “Given the low-yielding economic environment, fund managers are struggling to find opportunities in developed markets to provide investors with significant growth. We believe some Eastern European property markets offer a fantastic opportunity for capital appreciation.” He adds that the British property market has seen considerable growth since the 1990s and now offers less value than some developing markets. The manager’s considerable knowledge of the risks contained and developing in Eastern European markets will be used to manage the portfolio, Coxshall says. Turkey has attracted significant interest from investors following its political and economic restructuring. Several Eastern European countries have been going through reform processes with the aim of eventually joining the European Union. Many fund managers have bought into Eastern European assets in anticipation of benefiting from this accession theme. The fund will invest in commercial and industrial properties and will be targeted at both institutional and high net worth investors, including fund of funds managers and private clients. The portfolio launch is planned for the fourth quarter of 2005 and will aim to attract between 75m and 100m, explains Coxshall. Gallagher was previously both chief investment officer and head of Europe for Legg Mason Investments, where he ran the onshore European Equity and Dublin-domiciled Continental European funds. But Gallagher, who joined Legg Mason in 2002, left the company in October 2003.