Mayfair Capital Investment Management has launched a new UK Fund with co-investment from Swiss Life Group.
The MC Thematic Growth Fund is a closed-ended structure with a 5-7-year life targeting a return of 8-10% per annum with the use of up to 35% leverage. The stabilised income yield is targeted to be 5% per annum once the fund is fully invested.
With c. £100m of equity committed, the fund has already contracted on two purchases with a total value of £40m. Merseyside Pension Fund is also an investor in the fund which is being marketed to institutional and family office investors.
James Thornton, Chief Executive of Mayfair Capital, said: “We are a highly thematic investor and this fund will invest strictly in accordance with our key themes of demography, infrastructure, technology and e-commerce.
“The strategy focusses on acquiring assets that will appeal to the occupiers of tomorrow as well as today. We believe that some property benchmarks are becoming outmoded and are based on assets which are increasingly functionally as well as physically obsolete. Given the rapidly changing occupier dynamic, investors need to be ahead of the curve and provide the environment and amenities demanded by occupiers.
“Our track record during the past 3-5 years demonstrates our conviction-led, thematic approach delivers superior, risk-adjusted returns.”
The intention for the fund is to raise a further £150m of equity at a further close, giving a total fund size of around £400m with leverage.
Co-investment of up to £80m from Swiss Life to the Thematic Fund further endorses the attraction of UK property to overseas investors. The investment has been subscribed by the Swiss, French and German insurance companies.
Swiss Life Group Chief Investment Officer, Stefan Mächler, commented: “As a significant insurance company we have a strong commitment to real estate in our asset allocation. The UK market is attractive to us on a relative pricing basis and we remain confident in prospects for the UK economy. Mayfair Capital have a proven track record and we are pleased to be making this investment in a fund with an interesting strategy”.
The fund’s first two acquisitions are multi-let office investments in Birmingham and Newcastle. Both are aligned with the ‘live/work’ trend where occupiers are favour city centre offices which are close to amenities and transport hubs ahead of business parks or other out-of-town locations.
James Thornton comments: “Multi-let offices enable income profiles to be managed from a risk viewpoint with the ability to improve and reposition the assets to ensure they appeal to the right quality of tenant. To retain the best talent, employers have to provide an environment that their employees wish to work in, with a full range of amenities.
“Further acquisitions are in hand in other sectors of the market.’'