UK - Managing Partners Limited's British Property Opportunities Fund is expecting to return over 10% in its first year by snapping up bargain repossessed UK properties from banks at 30%-discounted prices.
The £5m (€5.6m) fund, launched in February this year, is targeting an annual return of over 10% by investing in residential and commercial property, including distressed portfolios, high-yield rental units, development opportunities and leasebacks.
More specifically, MPL - which is perhaps better known in the financial market for managing traded life policy (TLP) funds - is hoping to take advantage of the discounted prices appearing in the property market as a result of forced sales and return 12% in its first year by focusing primarily on the South East.
Jeremy Leach, managing director at Managing Partners Limited, said: "Our investment strategy for 2009 is to continue to buy and build our portfolio predominantly in the South East where there is the densest population.
"We like the South East because it has the highest density of population, a shortage of housing and a robust local economy, and therefore the South East will remain more robust," he added.
MPL's latest analysis of data from the Council Mortgage Lenders, Land Registry, Office of National Statistics and GFK NOP revealed landlords in England and Wales lost £52.8bn of equity in their property portfolios between October 2007 and October 2008, the equivalent to £144.77m a day.
"Some landlords have overstretched themselves financially and a combination of rising mortgage repayments and a decline in the value of their property portfolios means that many wish to sell. However, it is not a seller's market at the moment, so in many cases they need to accept lower prices if they want to sell," said Leach.
London landlords saw the biggest loss in equity from their properties, an estimated loss of £16.23bn over the same period, followed by the South East (£9.16bn) and the South West (5.88bn).
The fund currently has only "one or two small institutional investors" at present, as British Property Opportunities Fund will only begin its marketing strategy in January 2009.
"We didn't want to take in too much money while the market was undergoing a correction," said Leach.
The fund's UK marketing focus is largely retail at present as the minimum investment that can be made into the fund is £50,000 or £2,500 if an investment is made via an insurance bond or self-invested personal pensions wrapper.
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