It's hard to miss the Parus skyscraper. Located next to another giant – the Gulliver shopping center, it still doesn't get lost in the landscape. Just as the building itself catches the eye, news about the purchase of this property by Max Krippa automatically draws attention. Only the lazy did not talk about the change of ownership of the Parus Business Center, but in this case, we are not interested in the details of the deal, but in the goals of the investor Max Krippa.
When it comes to investing, the first thing beginners need to do is analyze the strategies and cases of experienced investors. In Ukraine, one of them is undoubtedly Max Krippa. The businessman has an impressive investment portfolio, whose profitability is, without any doubt, quite high. One can learn careful, balanced, and forward-thinking investing by following the example of Max Krippa actions and business decisions.
However, many journalists were puzzled by the fact that an investor who usually works with assets in the field of esports and gaming decided to buy real estate, and in such a volume. Experts, however, were not confused by Max Krippa action, and they quickly found an explanation for his decision. Two cards appeared on the hypothetical table, which do not exclude, but rather complement each other.
Balanced Asset Allocation
Diversification is an excellent tool for hedging against unforeseen events, and there are plenty of those in the global and Ukrainian economy. Every investor and even a person slightly familiar with economics knows that you should not put all your eggs in one basket. In other words, when forming an investment portfolio, you should not rely solely on one class or segment. The more diverse the asset portfolio, the lower the potential risks.
It works simply: out of 5 different assets, one may turn out to be unprofitable in the medium term, three may provide stable but small income, and the remaining one will show high profitability in the same medium term. Such income distribution allows the investor to have enough funds to continue working. But the scheme is valid only when there is a significant difference between the assets. If you take five identical assets working in the same market, they will all follow the same trend – either generating income or losses.
Considering Max Krippa investment portfolio, or rather the part known to journalists, it is easy to notice that most of the assets belong to one or similar segments. Max Krippa owns the recently acquired computer game development studio GSC Game World, the esports broadcast studio Maincast, and the esports organization NAVI.
All assets, to some extent, are related to the esports industry, and most of them do not have a physical form. Additionally, GSC Game World is in the active product creation stage and hardly generates any profit, while requiring significant capital investments. Such a portfolio is difficult to call balanced and typical for an experienced investor. But the acquisition of commercial real estate by Max Krippa significantly changes the situation.
Advantages of Commercial Real Estate
Real estate assets are often used for portfolio diversification, and this is no coincidence. Moreover, preference is given to commercial real estate, as it allows for stable and well-predictable income. In addition, such assets are not volatile — real estate prices do not change sharply or significantly. Most importantly, real estate has low correlation with other assets, which allows for portfolio diversification.
Interestingly, Max Krippa decided to buy not just any real estate, but commercial real estate, and class A at that. This is elite real estate, which is expensive but highly valued. Class A real estate has several advantages, all of which are key. First, income stability. Properties are located in prime locations; the Parus Business Center is located in the center of Kyiv, ensuring stable demand and stable income.
Secondly, real estate is traditionally considered a low-liquidity asset, which somewhat diminishes its investment appeal. But class A real estate has good liquidity and can be sold quickly if necessary.
Thirdly, assets in the form of elite commercial real estate usually do not lose value but rather gain it. Thus, investors can secure not only stable rental income but also capitalization.
Like any asset, real estate has its drawbacks. Key ones include high cost, maintenance expenses, and sensitivity to economic fluctuations. Max Krippa handles the first two — he already had enough money for the purchase; experts estimated the deal at 100 million US dollars. As for economic fluctuations, these risks accompany investors by default, especially in Ukraine and especially during a full-scale war.
Investment Goals in Parus Business Center
Let's return to the specific investment goals. Diversification is more or less clear — a simple, understandable, traditional method of risk insurance and portfolio balancing. But there is another point that experts are already talking about.
The idea of creating a large esports hub in Ukraine has been in the air for a long time. At the dawn of esports, Ukraine was a country with good cheap internet, affordable prices, and high levels of service. These factors motivated esports athletes from all over the world to come to major Ukrainian cities and set up training bases. But the development of the industry and reaching a serious level no longer allows effective training in a private apartment in Kyiv — professional equipment and infrastructure are needed.
Experts believe that Max Krippa decided to develop Ukraine's esports potential and make it more attractive for international cooperation, including by setting up a large modern hub.
