Cording Real Estate Group plans to invest £400m (€449m) in UK housing after raising £100m from German institutional investors.
The investment manager has launched the Cording UK Residential Investment Fund and hopes to raise an additional £150m of equity from continental European institutional investors.
It will use debt to enable it to invest £400m in the UK’s private-rented sector (PRS) over the next four years.
The fund is designed to hold a diversified portfolio of assets over the long term, generating a net income return of more than 5% per annum.
The fund can enter into forward-commitment and forward-funding agreements. It will also have the ability to acquire completed and fully-leased PRS projects.
Cording said it had a strong pipeline of investment opportunities and expects to transact on the first two deals shortly.
The company said it used “a unique and comprehensive research approach”, focusing on the lower-to-mid end of the market.
It has identified a number of regional cities and Greater London locations where demand for rented accommodation is forecast to be persisently strong and supply will remain constrained.
John Partridge, chairman of Cording, said: “We are delighted with the support shown by our investors towards our PRS team and our vertically-integrated approach, providing in-house development management, portfolio management, asset management, leasing and property management.”
The open-ended SICAV fund is domiciled in Luxembourg.