Imperium Investment Management has launched a closed ended fund registered with the Cayman Islands Monetary Authority to invest in real estate and infrastructure projects.
The target raise is USD100 million and the management team is expecting the majority of the inflows to be received from professional investors in Asia and UAE.
Mike Young, fund advisor, says: “There continues to be a shortfall of investment in infrastructure projects across emerging markets and we are reviewing some very attractively priced opportunities. Residential real estate is also a sector that we are seeing very strong demand for, though country selection and timing skills are key to this sector as new supply can surge or retreat quickly.”
The fund will invest at least 80 per cent of its capital into emerging markets but can also allocate up to 20 per cent of the fund in developed markets to aid diversification and to take advantage of compelling opportunities globally.
“We selected the Cayman Islands as a domicile for the fund as it offers the right balance between regulatory protection for investors and investment freedom for the management team,” says Young. “Also we were highly impressed with the breadth and depth of administration, auditing and legal expertise we could draw on allowing us to focus on the core activities of project selection, appraisal and management.”
The target return is 12 per cent net of fund fees per annum, a significant proportion of which could be income.
The fund uses a proprietary risk pricing model that identifies all project risks and assigns a risk grade to each factor. The model then calculates a required rate of return for the project to adequately compensate the fund investors for the individual and collective risks. If the project financials are offering a high probability of surpassing the required rate of return the fund investment committee then investigates the project with site visits and an extensive due diligence process.