Paloma secures institutional support for £300m UK fund
Private equity real estate manager Paloma Capital has raised £140m for its debut fund, focused on the UK.
The company has added senior debt to bring Paloma Fund I’s capital to £300m, it said in a statement. It also has access to further capital through co-investments if necessary to complete larger transactions.
The fund’s 21 investors include company and public sector pension funds, endowments, funds-of-funds, and family offices.
Paloma Capital – set up in 2015 by former Schroders fund manager Joe Froud and Helical Bar director Jack Pitman – raised £98m with the fund’s first close in December 2015.
The managers have already begun investing the capital, targeting warehouses and industrial assets.
They have acquired 21 assets in total through 16 transactions, including industrial parks in Stockport, Manchester, Redditch, Sheffield, and Portsmouth. The purchases have achieved an average initial yield of 8%, the company said.
Froud said: “In a market where most investors seem obsessed by big shiny logistics boxes, we have acquired 2.5m sqft of smaller multi-let estates that are benefitting from exactly the same positive supply/demand dynamics, but at half the price per square foot and almost twice the yield.”
Pitman added that the managers were “generally nervous” about retail sector assets but had found profitable niches in “out-of-town” areas.
The company said its approach was focused “heavily” on income generation, targeting “smaller, undermanaged assets”.