Barwood Capital is seeking to raise £50m for a five-year fund, providing a total investment capacity of up to £200m.
The fund will target underperforming commercial real estate assets with lot sizes of between £3m and £20m in UK regional markets.
Barwood will add value and then sell improved assets into the prime market to take advantage of the positive arbitrage between primary and secondary assets.
The fund has received commitments of more than £25m 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.
