US investor teams up with fund manager in venture capital operation
Erica Billingham
Cargill, the secretive US investor, has teamed up with fund manager Electra Partners to inject up to £250m into venture capital-style property deals.
Minnesota-based Cargill, the largest private firm in the world, has set up a limited partnership with Electra, called Electra Fairmile Property Partners.
Roger Isaac, property investment director at Electra, said the partnership is looking to back entrepreneurs who can deliver returns on their investment in three to five years.
“We’re property venture capitalists, not long-term investors,” he said.
The first deal, which Isaac hopes to sign before Christmas, is likely to be a portfolio that will be put into a special-purpose vehicle and then broken up.
Cargill is putting £50m equity into the joint venture which, with borrowings, will have the capacity to invest around £250m. Electra will find and manage the investments.
Cargill, best known for its international food business, already has property interests in the UK, including a £44m jv with Stockbourne, a tinyquoted company.
A spokeswoman refused to say how much Cargill has invested in UKproperty.
Electra struck the deal with Cargill after its client, Electra Investment Trust, decided to wind down its operations and return money to shareholders following an unsuccessful bid from 3i earlier this year.
Electra’s deals on behalf of EIT included financing Morrison Developments’ Sterling Mills factory outlet village in Scotland and a second jv with Hemingway Properties.
Last year, the fund injected equity into Fairbridge Estates, which owns rented homes.
Isaac said the Cargill jv would be unlikely to back a start-up company from scratch. But he would consider supporting a breakaway management team to secure their first deal.
