FINANCE: Healthcare investor MedicX plans to double the size of its £500m listed fund over the next five years, according to chief executive Mike Adams.
The MedicX Fund owns a 134-strong portfolio of GP surgeries and primary healthcare centres across the UK, and currently has an acquisition pipeline of around £100m.
Strong investor demand for healthcare property combined with the NHS’s plans to shift the provision more services from hospitals to primary health centres are the drivers for the MedicX Fund’s expansion plans, Adams said.
The fund has an LTV of 50.7% as of 31 March this year, but has the capacity to gear up to 60%. Rents increased by 15.6% in the last financial year to £13.4m, and the fund returned 8.8% to investors over the period.
MedicX Group was bought by boutique fund manager Octopus Investments in a deal which completed yesterday.
Octopus has not disclosed a price for the transaction, which relates to MedicX’s fund management platform rather than the assets it manages. The company, which was owned by management and private equity investor Cabot Square Capital, put itself up for sale in April through KPMG with the hope of attracting bids in the range of £40m.
Mike Adams, chief executive of MedicX, will continue to lead the existing team following the acquisition.
Commenting on the acquisition of MedicX, Octopus Investments chief executive Simon Rogerson said that he views the platform as a ‘long-term hold’:
“Healthcare investment in the UK has been dominated by private equity until now. This has been a problem because this type of investor tends to take a short-term view – which does not sit well with a sector that is concerned with the long-term care of the elderly. We see MedicX as a longer-term play for us, and we won’t be selling on after four or five years.”
sophia.furber@estatesgazette.com
