Threadneedle is in talks with investors over extending one of its core-plus funds and is lining up fresh debt for the vehicle.
The fund manager is looking to push the life of the closed-ended Strategic Fund IV out until 2016. It launched in 2009 with a five-year duration, and a one-year extension period to 2015.
The vehicle was set up in conjunction with Barclays Wealth, and was available to the bank’s high-net-worth private clients alongside institutional investors in the UK and overseas.
Barclays Wealth was set to hold around 20% of the total equity raised. The equity total is capped at £400m.
The fund targets a net distribution yield of about 10% by investing in income-producing properties in all sectors across the UK.
At the time of the launch, Peter Mackaness, property investment specialist at Threadneedle, said the strategy was to get money into the market over the next 12 to 18 months and then “get out as close to the top as is possible”.
As part of the extension plans, Threadneedle is also understood to have lined up Wells Fargo to provide a new £220m facility for the vehicle.
It will replace a £130m debt facility secured on a 50:50 basis from RBS and Eurohypo – now Wells Fargo – in August 2009.
It is also understood to replace a second facility of circa £90m that Threadneedle had in place with Santander.
Wells Fargo is underwriting the entire new facility, which reflects a leverage of between 55% and 60%.
The duration of the loan is expected to be two years to tie in with the extended life of the fund.
The size of the facility makes it a likely candidate for syndication, although Wells Fargo would be expected to hold on to a majority piece.
All parties declined to comment.
bridget.oconnell@estatesgazette.com
