by Erica Billingham
Independent property fund manager Baring Houston & Saunders has pulled Japanese and Dutch investors into a £109m limited partnership alongside UK pension funds.
The Lionbrook Property Partnership, which was launched in August, closed this week above BH&S’s £100m target.
The new investors are Japanese bank Sumitomo Trust, Dutch pension fund PGGM and ING Real Estate, the property arm of Dutch financial services group ING, which have put a total £38m into the fund. UK company and local authority pension funds make up the balance.
BH&S also announced the appointment of outgoing Norwich Union property director, Nick Price, as a non-executive director of BH&S General Partner, which will run the Lionbrook fund. Price will take up the post on January 1.
Lionbrook was formed from three small property unit trusts (PUTs) – Lilliput and Swift, run by BH&S, and New Court, which the fund manager acquired with Rothschild’s property division in June.
BH&S injected the PUTs into a limited partnership structure which opened the fund to other investors which are not exempt from tax.
Director Celia Jennings said: “This is the first time anyone has brought overseas and UK tax-exempt investors together in one vehicle.”
The fund, which has a 10-year life, will specialise in actively managed property and development, and will not focus on a particular sector of the market.
BH&S is about to invest the new money raised and is negotiating on a £9m City office property.
A further £15m is earmarked for developing properties in the Lionbrook portfolio, including a site in the centre of Bournmouth where BH&S is planning to build 3,231m2 (34,776 sq ft) of retail space with 21 flats. The scheme has a £13m end value.
Recent acquisitions include the £3.3m Bredbury Industrial Park in Stockport, bought on an 8.5% initial yield.
ING Real Estate, one of the three overseas investors in Lionbrook, owns two-thirds of BH&S.
BH&S managing director Robert Houston said: “We have been able to raise significantly more money than we had hoped for.
“The challenge now is to invest those funds and provide the Lionbrook partners and unit holders with above average long-term returns.”
