UK asset manager Kames Capital plans to raise insitutional capital for a second specialist healthcare-related property fund.
The company is currently speaking to investors to gauge interest in the vehicle, which would be a closed-ended Jersey Property Unit Trust focused on long-lease property in the UK care homes sector.
Shaun McWilliam, head of institutional sales for Kames’ property funds, told IPE Real Assets that the company was expecting “a lot of interest” from pension funds, insurers and endowment funds in the new product.
The manager is aiming for a first close of £100-150m (€113-170m), depending on interest from prospective investors, McWilliam said. In total, Kames hopes to raise £250-300m.
The annual fee will be 75 basis points, with performance fee charged at the end of the 10-year life of the fund
The strategy will replicate that of the Kames Target Healthcare Property fund, a £122m unit trust launched in 2010, which invests predominantly in care homes. However, McWilliam said the fund manager would also look at related investments such as partnerships with National Health Service operators to provide short-term accommodation for patients leaving hospital.
“We like this strategy and investors liked the first fund,” McWilliam said. “It’s had very strong cashflows and returns have been very strong too.”
According to the unit trust’s second-quarter update, the portfolio generated 3.9% a year capital return since its launch in February 2010 to the end of June 2017, and an income return of 5.4% a year.
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