Bridges Ventures announces launch of £500m Property Alternatives Fund
Fund to target niche sectors and strategic locations in latest impact investment vehicle
London 16 May 2014 – Bridges Ventures (‘Bridges’) has today announced the first close of the Bridges Property Alternatives Fund, with £120m 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 £200m at final close, which will be geared at the project level to deliver about £500m 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.
Its launch follows the success of Bridges’ existing property funds where realised returns have typically been at 20%+ IRR, leveraging the Company’s twelve year track record of delivering strong financial returns for investors alongside positive societal impact.
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 successful 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 £60m reflecting a sub 6% yield and delivering a 27% 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 £100m portfolio of care homes, delivering long term, index-linked income for investors, and capitalising on the growing demand for high quality health care provision to support the UK’s ageing population. The firm also has significant experience of creating and managing property-backed operating businesses including low-cost gym chain pioneer The Gym, business workspace provider The Office and The Hoxton Hotel.
Off-market transactions and investment alongside experienced partners typifies Bridges’ strategy of investing at an early stage in growth locations and in niche sectors, to create a high quality, sustainable development or operating business with the potential to generate strong returns for investors as well as fulfilling societal needs.
Simon Ringer, Partner and Head of Property Funds at Bridges Ventures, said: “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 £120 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.”
Founded in 2002, Bridges Ventures specialises in using sustainability and wider social impact as a lens to identify opportunities where an investment’s potential to create value for society also drives financial value. In the property sector, these include meeting demand for specialist properties, unlocking the potential of emerging locations, or improving the energy footprints of buildings to increase their attraction to occupiers and to future-proof value for investors.
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