LGPS Central, a vehicle pooling eight local government pension schemes (LGPS) based in the UK Midlands, has lanuched a UK direct property fund targeting up to £500 mln (€582 mln) in investments.
The UK direct property fund is a sub-fund of the LGPS Central Property ACS, developed in collaboration with partner funds and managed in partnership with DTZ Investors.
The fund has a medium-term target to invest up to £500 mln across the UK in a balanced portfolio and has been seeded with investment from Leicestershire pension fund and Nottinghamshire pension fund.
As an open-ended vehicle, the fund is flexible to allow for further or new investment from other Partner Funds to meet their requirements.
Gordon Ross, chief investment officer at LGPS Central, said: 'We have developed the UK property fund in collaboration with our partner funds and utilising the vast experience and networks of DTZ Investors.
'Their differentiated approach to portfolio construction and management, focusing on specific traits of the assets rather than purely sector and geographic focus, is a key driver of our partnership.'
In tandem with the LGPS Central UK Direct Property Fund, LGPS Central and DTZ Investors will also provide an additional offering to partner funds, to manage legacy portfolios if desired, thereby providing additional flexibility to investors.
The fund's responsible investment approach means that opportunities to improve ESG credentials have been embedded into business plans, and will be developed through regular ongoing tenant engagement, according to the parties involved.
Ross added: 'The UK Property Fund is designed to take advantage of the economies of scale that come with real estate investing providing a cost-effective investment solution for LGPS Central Partner Funds as assets under management increase.'
Sam Brice, fund manager at DTZ Investors said: 'We are delighted to have been appointed to support LGPS Central and the Partner Funds in realising their real estate investment strategy; the acquisition of Crown Road, Enfield and Clayton Business Centre, Hayes are an important first step in building the new fund.
'The acquisitions reflect a strategy that will target investments with a diversified tenant base, with opportunities to grow rental income and which are capable of being managed to meet our RI objectives.
'Both Enfield and Hayes reflect our geographic bias to investing in strong urban locations with Hayes in particular benefitting from wider infrastructure led regeneration. The fund is actively seeking further opportunities to deploy capital in key markets across the UK with a focus on implementing our Responsible Investment philosophy.'
DTRE acted for DTZ Investors and LGPS Central, Gerald Eve and BNP Paribas acted for the respective vendors. Burges Salmon advised LGPS Central on the legal aspects of the acquisitions.
