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Rutley Capital Partners, the real estate private equity arm of Knight Frank London, has reportedly given up its plans to invest in Russian commercial real estate through its Rutley Russia Property Fund (RRPF).

In 2007, the London-based company pledged to invest up to $1 bn (EUR 670 mln) in Russia. The fund was managed by a joint venture between Rutley Capital Partners, several partners of Knight Frank Russia, GVA Sawyer, and Duet Private Equity.

According to Russian newspaper Vedomosti, Rutley is returning money to its investors on the back of increasing risks in the Russian property market. According to the paper, Cameron Sawyer, president of GVA Sawyer and one of the investors in the operation, has confirmed the cancellation of the fund and the reimbursement of the equity.

In 2007, RRPF completed its first fund raising of approximately $100 mln as a private placement and said it would invest the proceeds in office, retail, and industrial properties in Moscow, St. Petersburg and in larger Russian regional cities. So far the fund has bought a car services centre of 5,300 m² in Kiev for $20 mln.

As a result of the crisis, credit in the country has dried up and the fund manager has offered investors the possibility to change strategy or to give the money back. Investors chose to be reimbursed, and have already received a total of $80 mln while the remaining $20 mln will be transferred after the sale of the car centre.