The pension fund investment management arm of BAE Systems has invested approximately €100m in a newly created fund holding 23 healthcare property assets across Europe.
Specialist healthcare operator Korian will manage the portfolio, which includes nursing homes, and post-acute and mental healthcare clinics in France, Germany and Spain. Four of the assets are being redeveloped and one is a greenfield development site.
The portfolio has net equity value of about €200m, based on a gross value of close to €320m.
The fund has a 15-year life, with the potential to be extended, and a minimum lock-up period of seven years.
BAE Systems Pension Funds, which was advised by specialist healthcare investment adviser Elevation, is expected to earn about 4.5% per annum, with a floor and a cap on the exit yield, which allows Korian to benefit from any significant increase of the value of real estate portfolio above the cap over the long term.
Korian, which launched its real estate strategy in 2016, has a €2.9bn healthcare real estate portfolio across Europe which is projected to reach €4bn by 2023.