InfraRed Capital Partners has raised £475m of equity for its new fund focusing on value-add opportunities in the UK, Germany and France.
With borrowings, this will give InfraRed Active Fund III an investment capacity of about £1bn, said the fund manager, a real estate spin-out from HSBC in 2011.
The new fund, which exceeded its subscription target of £400m, will pursue investments in the shopping centre, industrial and office markets, with the UK expected to comprise more than half of the total portfolio.
More than 40% of the fund’s capital is already committed to six projects, including the Eastgate shopping centre in Basildon, Essex; the Mill Gate shopping centre in Bury; and more than 2m sq ft of industrial and logistics space in the UK regions.
The portfolio also includes the Hachette Tower, a 145,000 sq ft office block in the 15th district of Paris, and the 410,000 sq ft Leitwerk building in Munich.
Chris Huxtable, head of European real estate at InfraRed, said the existing investments were all performing “in line with, or ahead of, their business plans”.
The fund may also pursue equity co-investment opportunities.
Institutional and high-net-worth investors backing the fund are said to include sovereign wealth vehicles and John Caudwell, the billionaire mobile phone entrepreneur.
The fund’s debt is being provided mostly by traditional lenders. Loan-to-value ratios will typically range from 50% to 65%.
InfraRed manages a total of $7bn of equity capital, primarily for institutional investors. It has now raised 15 funds, eight in real estate and seven in infrastructure. It is currently fundraising for its China Real Estate Fund II, which launched in 2012.
