UK local authorities and US pension funds have backed a new sustainable real estate fund in the UK.
Bridges Ventures, an ‘impact investment’ specialist, said it has raised £212m (€299m) for the Bridges Property Alternatives Fund III.
Roughly 80% of the capital came from UK and US pension funds, including local authority schemes in Greater Manchester, Merseyside and South Yorkshire. The rest came from family offices, foundations and insurers, including US-based Prudential Financial.
Bridges Ventures said it was able to exceed its first-close target of £200m because of “strong interest from European and US institutions in the rapidly growing area of sustainable and impact-driven property investment”.
It is the largest fund Bridges Ventures has raised for any investment strategy. Leverage could give the fund investment capacity of £500m.
The fund will invest in direct property and property-backed businesses focused on regeneration areas, buildings at the cutting edge of sustainability, and niche sectors being affected by changing demographics and consumer needs, such as as healthcare, education and affordable housing.
It is also targeting serviced offices for SME businesses, which it believes “play a vital role in job creation and regeneration”. The fund has already bought portfolio of serviced offices from Regus for £85m.
It is building 240 apartments as part of the regeneration of the now-derelict, former EMI Music site in Hayes in suburban London, and has carried an environmentally-led refurbishment of a part-vacant office building in Leeds.
It is also redeveloping a derelict site in Wolverhampton to create a 400,000sqft warehouse and logistics scheme. As a result, approximately 40% of the fund has already been invested and committed.