Two UK local authority pension funds are investing in Kames Capital’s latest fund targeting secondary property, hoping to capitalise on uncertainty surrounding the Brexit vote.

Leicestershire County Council Pension Fund and Nottinghamshire County Council Pension Fund are committing a combined £55m (€62.6m) to the Active Value Property Fund II.

Both pension schemes, which are part of the soon-to-be-established Local Government Pension Scheme (LGPS) Central investment pool, have said post-referendum volatility could create investment opportunities.

Colin Pratt, investments manager of the Leicestershire County Council Pension Fund, said: “UK secondary property offers an attractive and stable yield, and following the EU referendum vote we believe that the uncertainty will throw up opportunities within the property market.

Simon Cunnington, senior accountant at Nottinghamshire County Council Pension Fund, said: “The result of the EU Referendum is leading to high levels of volatility in the UK commercial property market.

“This offers opportunities for active investors to acquire good-quality secondary assets at attractive prices.”

The two pension schemes join West Midlands Penson Fund – another member of the Central pool – which provided £50m in seed investment for the closed-ended fund earlier this year.

The fund, a successor to Kames Capital’s £275m Active Value Property Trust, is managed by Philip Bach and is targeting a blended initial yield of 7-8% per annum on assets purchased.

It will target good-quality assets between £5m and £15m.