Aviva Investors and pension fund back Nordic care home fund

Aviva Investors and a European pension fund have joined an initial capital raise for a pan-Nordic care home fund.

Local real estate manager Northern Horizon Capital has raised €121m in a first close for its Nordic Aged Care fund.

Aviva Investors’ Global Indirect Real Estate business was a cornerstone investor alongside an unnamed European institutional investor.

Helsinki-headquartered Northern Horizon (formerly BPT Asset Management) is being advised by Capra Global Partners and hopes to raise €250m in total.

The company already manages two care home funds that invest exclusively in Finland – the first has sold all of its investments and the second has invested all of its capital.

The new fund will invest in other markets including Sweden, Norway and Denmark, and will acquire a mix of new-build, existing assets and those chosen for conversion. It will lease the assets to private and public care operators.

“We have more than eight years’ experience as an investor in aged care assets, long-standing relationships with public and private care operators, municipalities and developers,” said Northern Horizon CEO Michael Schönach. “This is a strategy we are very comfortable with.”

John Gellatly, head of EMEA for Aviva Investors’ real estate multi-manager business said the strategy “played into some strong demographic fundamentals” and offered “attractive risk-adjusted returns based on indexed and stable cash flows and strong credit covenants”.

Schönach added: “We already see a substantial shortage of care facilities across the Nordics to accommodate the present and future need for more beds and more flexible care.

“This creates a unique opportunity for private equity real estate investors. We much appreciate the support of our first closers to the new fund.”