Aviva Investors raises £80m for investment in nursing homes

Aviva Investors has raised over £80 mln (EUR 90 mln) of fresh equity for its Quercus Healthcare fund in efforts to take advantage of buying opportunities in the market. 'There is a significant appetite from investors for this type of product', Aviva Investors' head of UK real estate Richard Jones told PropertyEU in an interview. With leverage of around 40%, the fund will have a spending power of some £140 mln.

Quercus, which is predominantly focused on the elderly care sector, was launched in 1998 and currently has assets worth over £600 mln located across the UK. Last month, the fund sold a portfolio of hospitals for £54 mln as part of its new focus on care homes. The fund represents a joint venture with property manager Quintain which holds a 16% interest in the fund. Aviva Investors control over 50% of the vehicle.

Jones said that the company has also raised £220 mln of cash for a new UK real estate recovery fund, which will seek to invest in UK commercial real estate across a range of high-performing sectors over a five year period. The fund is aimed at institutional investors and has already completed half a dozen acquisitions for over £50 mln.

So far, the Recovery Fund has purchased a hotel with supermarket, a provincial office and two retail warehouses, and a Greater London high-street retail property. 'We are currently working on a strong pipeline of other opportunities and look to be fully invested by mid-2010,' commented its fund manager Rob Walton.

Aviva Investors manages over £21 bn in real estate assets globally, of which £15 bn in the UK and £4.5 bn in Continental Europe.