Bridges holds £168m first close on fourth property fund amid strong investor demand
- Property Alternatives Fund IV raised money in just three months thanks to strong demand from existing investors, particularly local authority pension funds
- Bridges’ previous property fund has been fully invested in just two years across 14 transactions
- The new fund will follow the same strategy of investing in niche sectors and emerging locations, with a focus on environmental refurbishment and operational improvement
Bridges Ventures (“Bridges”), the specialist sustainable and impact investor, has held a first close of £168m on its new property investment fund, Bridges Property Alternatives Fund IV, after just three months in market.
The fund received strong support from Bridges’ existing investors; particularly the UK local authority pension funds, who this time have invested as a combined pool, driving greater efficiency.
Bridges’ previous fund, Bridges Property Alternatives Fund III, held a final close above target on £212m in June 2015. That fund is already almost fully invested or committed, reflecting the strong level of deal flow Bridges has been able to access from its strong regional networks and joint venture partners.
The early success of this latest fundraise reflects both the growing institutional interest in sustainable and impact-driven property investment, and also the strong track record that Bridges has developed across its three previous property funds, thanks to a series of successful investments.
Recent exits have included: the £6.6m sale of Airedale House in Leeds, reflecting an 8% net initial yield; the £20.5m sale of two care homes in Diss and Stoke Mandeville to Octopus Healthcare, a yield of 5.4%; and the £11.65m sale of 158/170 Edmund Street, a refurbished office building in central Birmingham, a yield of 5.75%.
The new fund will continue Bridges’ strategy of investing in emerging locations and niche sectors being affected by changing demographics and consumer needs – including healthcare, education, SME business space and affordable residential accommodation. It has a particular focus on adding value through environmental refurbishment and operational improvement.
Bridges’ property investment themes have included:
- Environmental refurbishments of office buildings, such as 6 East Parade in central Leeds
- Lower-cost housing in Greater London, including the building of 240 attractive residential apartments as part of the regeneration of the Old Vinyl Factory in Hayes, and the redevelopment of Chesterfield House in Wembley
- SME office space, notably through the £85m acquisition from Regus of the Evans Easyspace portfolio, with assets diversified across 50 locations providing serviced offices and industrial space
- Residential care homes for the elderly, notably through our specialist CarePlaces Fund
Simon Ringer, Partner and Head of Property Funds at Bridges Ventures, said:
“We hugely appreciate the support we have had from our existing investors to get us to a first close on this fund, which we believe is a strong validation of the strategy we’ve been able to hone over our previous funds.
“We are particularly grateful to our local authority pension fund investors, who have pooled their resources so effectively in order to ensure a speedy close – thus enabling us to take advantage of our strong pipeline of investment opportunities.
“The fact that we were able to invest our previous fund in a relatively short period shows that our impact focus and strong network of specialist partners continues to give us a competitive advantage in sourcing attractive off-market deals – often where other investors are not looking – where we can bring our proven asset management and operational improvement skills to bear.
“We expect Fund IV to be a case of ‘more of the same’ – ensuring that we can continue to deliver positive and measurable financial impact alongside strong financial returns.”
Notes to editors
About Bridges Ventures
Bridges Ventures LLP (“Bridges”) is a specialist fund manager focused exclusively on sustainable and impact investing – using commercial investment strategies to generate attractive financial returns alongside positive social and environmental impact. In the last 14 years, it has demonstrated that by using impact as a lens to identify and engage with investments, it is possible to deliver outstanding returns for investors and positive societal impact. The firm has now raised almost £800m across its Sustainable Growth, Property and Social Sector funds.
The Bridges Property Funds target niche real estate opportunities driven by demographic shifts and changing consumer needs in areas like healthcare, education, SME business space and affordable residential accommodation. Bridges seeks to make property investments – either directly or via joint ventures – that have the potential to make strong financial returns in addition to measurable social and environmental impact.
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