Bridges Ventures has held the first close of the Bridges Property Alternatives Fund, with GBP120m of equity already invested in the fund from both its existing and new institutional and private investors.
The firm is targeting total equity commitments of circa GBP200m at final close, which will be geared at the project level to deliver about GBP500m of firepower.
The new fund, Bridges Property Alternatives, will invest either directly or in joint venture in property and property-backed operating businesses. It will target niche real estate sectors which are driven by demographic changes and consumer needs such as healthcare, education, SME business space and affordable residential accommodation, as well as other sectors where there is identifiable occupational demand in growth locations.
Bridges’ existing property funds have realised returns of around 20 per cent + IRR.
Most recently, Bridges Sustainable Property Fund, which was launched in 2009, and which invested in properties in regeneration areas and assets demonstrating environmental best practice, completed the exit of The Curve, a student accommodation development in Whitechapel, East London. The development, undertaken as a joint venture with Chancerygate, was sold to clients of LaSalle Investment Management for GBP60m reflecting a sub six per cent yield and delivering a 30 per cent IRR for Bridges investors.
Bridges’ property funds have also invested in a range of off-market healthcare developments, where, together with its development partner, Castleoak, it has built a circa GBP100m portfolio of care homes, delivering long term, index-linked income for investors, and capitalising on the growing demand for high quality healthcare provision to support the UK’s ageing population.
Simon Ringer, partner and head of property funds at Bridges Ventures, says: “Building on the strong performance of our existing property funds, we are deeply encouraged with the significant support we have received from investors to date. A first close of GBP120 million is an excellent starting point for transacting on deals, positioning us well to start implementing the fund’s investment programme.
“Our new fund takes an alternative approach to property investment, offering investors the potential of receiving market leading returns whilst creating a positive and lasting societal impact. Our in-house expertise is complemented by our strong network of development partners and entrepreneurs which provides us with continued off-market deal flow and repeat business and a number of off-market transactions are already in hand.”