UK - Several UK pension funds have gained exposure to a specialist real estate fund through the secondary market.
UK property company Quintain sold part of its stake in the Quercus Healthcare Property Partnership, which is managed by Quintain Fund Management and Aviva Investors, to the pension schemes at a 12% discount to the July net asset value.
The identities of the pension funds are unknown, because the deals were made through Aviva Investors anonymous matched bargain trading facility, but it is understood that most, if not all, of the purchases were made by multi-managers on their behalf.
There are now 50 underlying investors in Quercus, which invests in nursing and care homes and private hospitals throughout the UK.
A total of £31.3m (€35.5m) was paid to Quintain, which saw its stake in Quercus drop from 25.4% to 16%, representing a loss against book cost of £1.8m for the real estate company.
The latest transaction is part of an ongoing strategy to reduce leverage in the fund, and it brings the total amount of cash repatriated since April 1, 2009 to over £42m.
"This disposal represents another important milestone in our cash repatriation programme, taking the total raised to 85% of the £50m we intend to repatriate by 31 March 2010 and thereby further enhancing Quintain's financial flexibility and control over interest costs," said Rebecca Worthington, finance director at Quintain.
Tonnianne Dwyer, head of Quintain Fund Management, said the increase in the number of underlying investors in Quercus was a positive development for the fund, since it increased the capacity of liquidity for all stakeholders.
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