Octopus Healthcare Fund gets further institutional backing, expands portfolio

Octopus Healthcare has raised a further £133.5m (€150.8m) for its healthcare fund and has added seven care homes to the fund’s portfolio.

Octopus Healthcare Fund has received additional capital from new and existing institutional investors, takes the total equity raised for the Fund to £320m, the manager said.

The specialist UK and Ireland healthcare real estate investor launched the fund in August 2017.

Octopus said the fund has agreed to buy a portfolio of six, purpose-built care homes let on long leases to Care UK, for £110m. The assets are located in Banbury, Cheltenham, Horsham, Norwich, Ware and Witney.

The fund has also agreed to forward fund the development of a new elderly care home in the Midlands to be leased to a national operator.

Octopus said these acquisitions will take the fund’s total portfolio to 26 care homes.

Ben Penaliggon, a director at Octopus Healthcare, said: “This significant new capital raise for the Octopus Healthcare Fund and the acquisitions we have announced today are a strong endorsement of both our ability to source and acquire high quality UK care homes, of the appeal of this asset class to investors, and the highly supportive demographic trends that drive it.

“This marked the end of a successful year for the fund, during which it has secured over £279m of transactions into the UK elderly care home sector and we look forward to continuing to build the fund’s portfolio through a combination of standing investments, forward fundings and forward commitment acquisitions.”

Hiti Singh, the head of institutional investment at Octopus, said: “The strong fundamentals of healthcare infrastructure investment, including the sustainable, inflation-linked income, risk-adjusted returns and supportive demographics, continue to attract institutional investor demand.

Singh said 45% of investors in the company’s recent Healthcare Infrastructure survey indicated that they lack the investor skills and resources to invest in this asset class.

“This creates an opportunity for us to build on our long-standing track record in this area and unlock an opportunity for investors who have an appetite to increase their allocations in healthcare infrastructure.”