Moorfield Group, the UK-focused real estate investment manager, has raised an initial £330m (€392m) for MREFV – the latest fund in its flagship value-add series – and co-investment initiatives.
The total equity raised came from institutional investors based in Europe, North America and Japan, including Moorfield’s first UK-domiciled investors, in the form of university college endowments.
Moorfield is employing a “hub and spoke” model, where sector-specific sidecar spokes are seeded by the MREFV hub and grown with additional co-investment funding from the MREFV investors or in joint venture with other investors, the firm said.
The first spoke to have been created is the private non-traded REIT (MREIT), which is investing in the residential-for-rent sectors (single-family housing for rent and student HMOS). MREIT was set up in 2023 and has a target to reach a value of £500m.
Moorfield said it plans to raise a further £250m for the spokes, with vehicles planned initially in self-storage and multi-family build-to-rent (BTR). Purpose-built student accommodation (PBSA), co-living, logistics and industrial open-storage also have potential for sector-specific sidecar vehicles, Moorfield added.
In total, Moorfield is aiming for £1bn of investment in the UK.
Charles Ferguson Davie, co-CEO and CIO at Moorfield Group, said: “Having sold our BTR, PBSA and logistics investments in 2021 and 2022, we now see an attractive re-entry point, as demonstrated by our recent investment activity, and we will continue to pursue our thematic focus on the living and storage sectors.
“All our target sectors are marked by an undersupply of fit-for-purpose product, low levels of institutional ownership and demographically-driven tailwinds that will help propel their growth through the coming cycle and beyond.”
Since the launch of Moorfield’s flagship value-add fund series in 2005, the manager has raised around £2bn of discretionary capital from a global mix of institutional investors, including public and corporate pension schemes, endowments, multi-managers and banks.
From all realisations, Moorfield said it had achieved a weighted average internal rate of return of 24% and a 1.5x equity multiple.
Marc Gilbard, co-CEO and executive chairman at Moorfield, added: “Real estate is feeling the full impact of cyclical and structural change colliding, and while this creates opportunity, there is naturally a deep sense of uncertainty, so I would like to thank our investors who have placed their trust in us for this latest fundraise.
“Despite recent challenges, the UK remains one of the best places in the world to invest in real estate thanks to deep and liquid markets, which has allowed for a rapid repricing of assets.
“Beyond the diversification benefits and inflation-hedging qualities, investors in real estate know their capital has a positive real-world impact through funding the delivery of vital new housing and physical infrastructure that enables crucial economic activity.”
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