Laxey to float EUR 660m opportunity property fund on AIM

A fund established by activist UK investor Laxey Partners to invest in 'undervalued' property companies and funds in Europe is to list on London's junior Alternative Investment Market (AIM) on Monday. Terra Catalyst, a Cayman Islands-registered closed-ended property share fund, is thought to have raised almost £120 mln (EUR 160 mln) from institutional investors. It intends to use a debt facility from Credit Suisse to increase its investment volume to £500 mln (more than EUR 660 mln).

'The company will seek to take positions in undervalued securities and actively seek to close the valuation gap between where the security is trading and its intrinsic value. Risk will be managed, where appropriate, on a portfolio and stock specific basis,' Terra Catayst said in a stock exchange filing earlier this month. The fund plans to be substantially invested within six months of listing on AIM.

Terra Catalyst is the latest vehicle established recently to take advantage of the sharp fall in the share prices of the listed property sector and the decline of commercial property values in the last 12 months.

The Financial Times reported on Friday that European developer Parkridge, headed by property investor John Cutts, is setting up a £1 bn fund to acquire discounted retail property in the UK. Evans Randall, the UK investment banking and private equity group, has also launched a £1 bn fund to 'swoop' on high-quality commercial real estate assets being sold off by owners due to liquidity issues sparked by the credit crunch.

Back in 2002, Laxey Partners tried to force the break-up of British Land and the ouster of then chairman, even though Laxey only owned 1% of the British property giant.