Osprey Equity Partners is exploring options to raise up to £200m of equity for a new foodstore fund.
The private investment company, which is backed by the LJ Group, has had exploratory talks with advisers including Peel Hunt over plans to launch a REIT. It is also considering an unlisted fund structure or a limited partnership.
Osprey currently manages a number of unlisted single-asset funds of around £20m to £40m that forward-fund superstores or in one case a Hub by Premier Inn hotel in central London.
It raises equity from clients of the LJ Group, which is an independent privately held merchant bank and multi-family office with more than $7bn (£4.2bn) of assets under management, and uses bank debt to forward purchase these assets from developers.
It has now identified a large pipeline of foodstores that it would like to fund with around £200m of equity to carry out a multi-asset transaction.
A source said: “Osprey has various funding routes and is exploring the possibility of an IPO but has not formally appointed an adviser yet.”
The long-term secure income provided by superstores, supermarket dark stores and convenience stores, which often have 25-year RPI leases, is in demand from investors as retail lease lengths shrink.
Using a listed structure would allow institutional investors access to this long-term income from strong covenants, as well as supply liquidity to the fund.
Because Osprey has a number of deals lined up, if it were to launch an initial public offering it would not be a blind fundraise like that carried out by Tritax when it took in £200m after floating the Tritax Big Box REIT in December.
In January British Land revealed it had bought a 26% equity stake in a geared securitised structure that owns a £1bn Sainsbury’s superstore portfolio.
All parties declined to comment.
bridget.oconnell@estatesgazette.com
