Kames Capital has been awarded a GBP25 million property mandate from the Leicestershire County Council Pension Fund (LCCPF).
The mandate will be invested in the closed-ended Kames UK Active Value Property Fund, which has raised GBP205m since launch in October 2013. Of this, GBP140 million has been invested with a blended net initial yield of 8.55 per cent, with a further GBP40 million currently under offer.
The LCCPF is the fourth local authority pension fund to invest in the Kames UK Active Value Property Fund after Kent County Council, Kensington & Chelsea Borough Council and the West Midlands Pension Fund.
The Active Value Property Fund targets good quality secondary properties, particularly those in the sub-GBP15 million bracket. These provide access to good quality assets offering attractive income returns, together with asset management opportunities, such as through extending leases, letting vacant space and refurbishments. Kames believes this part of the market is often overlooked by large property funds and – with bank lending becoming more scarce and expensive – can also be difficult for smaller commercial property investors to access.
Managed by Philip Bach, the fund is structured as a Jersey Property Unit Trust and has a seven-year life, with the opportunity to extend for a further two years. The fund has a target return of eight to 10 per cent per annum.
Shaun McWilliam, Kames Capital’s head of institutional sales for property, says: “We are delighted to welcome Leicestershire County Council Pension Fund as the latest investor in our active value strategy. We are continuing to raise assets and expect to close the fund to new investors by the end of 2014.”