UK asset manager Barwood Capital is seeking to raise £50 mln (€70 mln) for a new five year fund targeting commercial property assets in UK regional cities.

UK asset manager Barwood Capital is seeking to raise £50 mln (€70 mln) for a new five year fund targeting commercial property assets in UK regional cities.

The fund, which is aiming for an investor internal rate of return of 15% a year, has received commitments of over £25 mln from current investors in Barwood’s existing property funds.

Barwood executives are personally co-investing over £1 mln in the fund, which is planned for closing in April.

With gearing and the reinvestment of proceeds, the vehicle is expected to have an investment capacity of £200 mln. It will target underperforming commercial real estate assets with lot sizes of between £3 mln-£20 mln in UK regional markets and across all asset classes.

Investment yields for secondary stock outside London remain significantly higher than prime assets in these regional markets with a spread of nearly 4% between prime and secondary stock yields.

The new fund follows Barwood’s recent launch of db symmetry, a new UK logistics joint venture between Barwood Developments and clients advised by Delancey.

Joanna Greenslade, managing director of Barwood Capital, said: 'We will look to identify underperforming assets before adding significant value, through letting up vacant space, achieving implementable planning permissions or programmes of refurbishment and development.'