Specialist housing provider Civitas Investment Management is planning to raise up to €500m this year for a new fund dedicated to acquisitions in Europe.
The investment manager, which specialises in community care properties, has spent the last two years exploring opportunities in Scandinavia.
Civitas invests in assets with buildings to support people with learning disability and autism, mental health illnesses, addiction and NHS step-down and homelessness accommodation. It rebranded this week, having previously operated as Civitas Group.
It has identified Scandinavia and Germany as “likely launch points” for initial investment, which will range from €250m to €500m.
The firm is in discussions with investors to back the fund, and aims to make its first acquisition in the next 12 months.
Group director Andrew Dawber said: “First funds are always difficult to judge in terms of size. That sort of range is a sensible place to start with.
“We don’t want to take so much capital that we are under pressure to deploy it very quickly. Equally we don’t want to be too small so that we are not really relevant.”
It is speaking to global investors to back the venture, including socially responsible impact funds in Europe, sovereign wealth funds and Asian investors. Civitas expects to grow the wider portfolio by at least £1bn every year.
Civitas will look to replicate its UK acquisition strategy in Europe, acquiring properties of between £1m to £10m with a focus on mental health and children’s services.
It already has £2bn in assets under management in the UK, with £900m through the social housing REIT, £1bn in infrastructure via an Asian investor and £400m of development under way in a jv with Schroders.
“We’ve been starting to identify potential assets and looking at local partners,” said Dawber.
“When you get down to this community level, people like them because they are state-funded and they have a strong social purpose, but finding them has always been the tricky part.”
Civitas will also look to grow existing partnerships, new joint ventures, and raise finance through the social housing REIT, boosting AUM by £1bn a year.
Dawber said: “There’s an enormous opportunity for the private sector to be able to step up, if it is prepared to accept reasonable, responsible returns for low-risk investments over the long-term.”
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