27 February 2015
Barwood Capital, one of the leading real estate asset and investment managers, focused on the UK regional markets, announces that it is seeking to raise £50 million for a new five year fund (the “Fund”), providing a total investment capacity of up to £200 million including leverage and the reinvestment of proceeds.
The Fund, which is targeting an investor IRR of 15% per annum, has already received commitments of over £25 million from current investors in Barwood’s existing property funds. It is intending to close in April 2015 and Executives from Barwood will also personally co-invest over £1m providing alignment with clients. The Fund requires a minimum investment of £500k and has been set up predominately for high net worth individuals, as well as professional and institutional investors. Barwood’s approach is to provide its investors with a real sense of asset ownership, yet enable them to spread their risk across a portfolio that is actively managed on their behalf, as well as a personal relationship and attention from senior accessible staff who truly understand the market.
The Fund will target underperforming commercial real estate assets with lot sizes of between £3 million-£20 million in UK regional markets and across all asset classes. Investment yields for secondary stock outside London remain significantly higher (i.e. prices of these assets are significantly lower) than prime assets in these regional markets with a spread of nearly 4% between prime and secondary stock yields. Barwood Capital, acting in its capacity as investment and asset manager to the Fund, will secure undervalued and under managed regional stock before adding significant value through asset management, planning gain and development, and then sell these improved assets into the buoyant and improving prime market, taking advantage of the positive arbitrage between primary and secondary assets (see figure 1).
Barwood Capital was established in 2009 and is FCA authorised. It has extensive real estate expertise and an excellent track record of delivering substantial returns to investors, having delivered a 12% per annum IRR on its 2009 income fund, which is being wound up shortly, and forecasting a 20% per annum IRR on its 2012 growth fund. Joanna Greenslade, Barwood Capital’s Managing Director, and Richard Bowen, both founding directors of Barwood Capital, will sit on the Fund Investment Committee while Ed Henson, Director, has responsibility for sourcing new opportunities for the Fund.
The new fund launch follows Barwood’s recent announcement that it has formed db symmetry, a new UK logistics joint venture between Barwood Developments Limited and clients advised by Delancey. db symmetry is focused on large logistics assets with lot sizes greater than those considered by the Fund.
Joanna Greenslade, Managing Director of Barwood Capital, said: “We have a proven track record in delivering value to investors across market cycles, as well as a highly experienced team of professionals who are deeply embedded in the regional markets. Against a backdrop of a recovering economy and increasingly liquid market for high quality UK regional assets, we will look to identify underperforming assets before adding significant value, through letting up vacant space, achieving implementable planning permissions or programmes of refurbishment and development.
“We are already active in the market, with an identified pipeline of assets, and we have the added advantage of being able to act quickly to complete on deals. We are looking forward to closing the fund and completing on our initial acquisitions.”