UK property company Jermyn Investment Properties has become part of a new model in property investment funds after receiving an agreed all-share £100m offer from Real Estate Opportunities group.
REO is a split-capital, closed-ended fund based in Jersey which will invest in UK and Irish property and European high-yield securities, also known as junk bonds. The fund has more than one class of share for investors who are looking either for income, growth or both.
The fund is backed by Irish developer Treasury Holdings. It has offered 596 REO ordinary shares for every 100 Jermyn shares valuing Jermyn at around £100.8m. Jermyn executive director Juliet Cogswell, who is also a director of REO, said the transfer offer was a “fair price” for Jermyn. “We are taking the model of investment trusts and incorporating property in order to give shareholders more value and diversification,” she said.
REO will hold portfolios from Jermyn Investments UK, Treasury Holdings, Castle Market Holdings (a 50-50 joint venture with Treasury Holdings in Ireland), and a new investment property portfolio of £84m. It will have initial consolidated assets of around £804m. Aberdeen Asset Management will manage the bonds portfolio and the fund’s UK property holdings, while Treasury will manage the Irish portfolio.
