Barwood raises EUR 62m for new fund

Fund manager Barwood Capital has announced a new £100 mln (EUR 124 mln) investment drive in commercial property, having closed a £50 mln fund and confirmed a major investment bank as a co-investment partner.

Barwood Commercial Property Fund is a five-year fund with an overall targeted internal rate of return (IRR) of 15% per annum. It will target properties with a value between £5 mln to £100 mln and aim to take a diversified portfolio approach investing in land with the potential for new or improved planning consents, developing pre-let offices and warehouses and securing investment properties with the potential for further value to be added through re-gearing leases or letting empty space.

Richard Bowen, managing director of Barwood Capital said: 'We have raised the new property fund and teamed up with a major co-investment partner to take advantage of historically low land values and strong investment and development opportunities in the commercial property market. Current market conditions and the continued absence of easily available finance mean that there has rarely been a better time to invest in property opportunities.'

Thisn is Barwood's third commercial property fund. It has also raised funds for residential development and for investment into strategic land with the potential for residential development. The first commercial property fund Barwood raised in 2001 has now closed and returned an average 20% IRR per annum to investors.

The second fund was raised in 2009 and is now fully invested in quality income producing industrial and office properties backed by good tenant covenants. The second fund has returned a 6% average annual return to investors to date and is on track to achieve an overall 13% IRR per annum over its six-year lifetime.

Barwood directors have co-invested in the fund and performance fees and a share of profits will only be extracted once a 6% priority return has been delivered to investors.