Mayfair Capital Management has boosted its £230m flagship charity fund by taking over a smaller rival through a rare “in- specie” transaction.
The investment manager has transferred eight assets valued at around £23m – reflecting a yield of 6.75% – from the Multi Strategy Property Trust for Charities, which was managed by Cazenove Capital, to its Property Income Trust for Charities.
It also took control of a £1.26m stake in the Unite Student Accommodation Fund as part of the transaction, which will see more than 100 MSPTC investors transfer to PITCH’s 400-strong investor base.
James Thornton, Mayfair Capital chief investment officer, said he was increasingly seeing charities consider in-specie transfers as they look at moving from a direct to indirect property exposure, adding that the firm was already working on another deal.
He said: “The move…provides good diversification, as opposed to concentrated risk in one or two direct assets, a strong yield from day one, and removes the burden of direct property management.”
In October, PITCH also refinanced its largest loan facility with Canada Life. The new £26m facility is fixed for five years at a rate of 3.6% a year, reducing PITCH’s interest costs by £300,000 a year. The fund’s loan to value is around 15%.
