MAPIC: Pradera eyes expansion of separate mandate business

Pradera is seeking to expand outside its traditional fund business into separate mandates, the retail specialist's new CEO James Bury told PropertyEU on the sidelines of the Mapic retail fair in Cannes. The stronger emphasis on separate mandates as well as joint ventures is the culmination of an 18-month restructuring period and a reflection of the current market climate, he noted. 'Funds remain the bedrock of our business, but we see further scope now for separate accounts.'

Pradera already has a number of partnerships with strategic long-term investors including AEW Europe. In the past two years the duo has acquired a number of retail parks in the UK including St Catherine’s in Perth. More recently, Pradera formed a joint venture with investment manager Brockton Capital to acquire another portfolio of retail parks throughout the UK in a further vote of confidence for the retail warehousing sector. 'We will continue to do joint ventures with people like that,' said managing director Neil Varnham.

The retail specialist is also working with German bank Aareal to stabilise and turn around distressed assets including one in Eskisehir in Turkey and another in Algeciras in Spain. The Turkish centre is owned by UK-based opportunity fund manager Peakside while the Spanish mall is owned by a local investor. Pradera has been linked to another asset management deal with a leading UK bank, but neither Varnham nor Bury would comment on the speculation.

In Turkey, Pradera already has an asset management contract for the Cevahir Shopping Centre, a 100,000 m² mall in Istanbul. The mandate is from St Martins Property Corporation, the investment vehicle of the Kuwait Investment Authority. 'Managing big targeted assets is part of our approach going forward,' Varnham said.

Pradera is in pole position to strengthen this side of the business, Varnham stressed. ‘It never occurred to the big superfund managers that they might need to look after their assets. But now that the music has stopped, asset management is driving performance today. We have a deep team across Europe. Now that the noise at the top has gone, we’re doing the job we’ve always done.’

The stronger focus on separate mandates and joint ventures does not mean that Pradera is moving away from its fund business, Bury added. ‘That remains the core of our business. For the moment, there's not too much activity in pooled funds, but we believe they will come back at some stage.’

Pradera has been seeking to raise funds in the past couple of years for its third European Retail Fund and a new Turkey fund. Bury is cautiously optimistic that the next round of fund raising for both vehicles will close in the first months of 2013.