The Merseyside Pension Fund has invested in a new £400m (€451.2m) UK fund set up by Mayfair Capital Investment Management.

Mayfair Capital said it has launched MC Thematic Growth Fund with co-investment of up to £80m from its parent company Swiss Life Group. 

The fund has a closed-ended structure with a 5 to 7-year life targeting a return of 8% to 10% per annum with the use of up to 35% leverage, it said. 

The stabilised income yield is targeted to be 5% per annum once the fund is fully invested.

The UK property specialist said with £100m of equity committed, the fund has already contracted on two purchases with a total value of £40m. 

The fund’s first two acquisitions are multi-let office investments in Birmingham and Newcastle.

The fund, which has Merseyside Pension Fund, is also being marketed to institutional and family office investors, it said.

James Thornton, the chief executive of Mayfair Capital, said: “We are a highly thematic investor and this fund will invest strictly in accordance with our key themes of demography, infrastructure, technology and e-commerce. 

“The strategy focusses on acquiring assets that will appeal to the occupiers of tomorrow as well as today.  We believe that some property benchmarks are becoming outmoded and are based on assets which are increasingly functionally as well as physically obsolete.”

The intention of the fund is to raise a further £150m of equity at a further close, giving a total fund size of around £400m with leverage. 

The investment has been subscribed by the Swiss, French and German insurance companies, Mayfair Capital said.

Stefan Mächler, Swiss Life Group’s chief investment officer, said: “As a significant insurance company we have a strong commitment to real estate in our asset allocation. 

“The UK market is attractive to us on a relative pricing basis and we remain confident in prospects for the UK economy. Mayfair Capital has a proven track record and we are pleased to be making this investment in a fund with an interesting strategy.”