Bridges Ventures, the London-based impact investor, has closed its latest real estate fund, Bridges Property Alternatives Fund III, on £212 million (€298 million; $334 million), just above its original £200 million target. The firm will use gearing to increase the potential firepower of the fund to more than £500 million.
Bridges puts the success of the fundraising down to strong interest from European and US institutions. Around 80 percent of the capital came from UK and US pension funds including UK local authority pension funds in Greater Manchester, Merseyside, and South Yorkshire, with the remaining capital coming from family offices, foundations and insurers, including US-based Prudential Financial.
The firm invests in property and property-backed businesses, with a focus on regeneration areas, environmentally-friendly buildings and sectors being affected by changing demographics – including healthcare, education and affordable residential accommodation.
Since its first close on more than £120 million in April 2014, Bridges has completed six deals in less than a year, deploying around 40 percent of the fund’s total capital, including the building of 240 residential apartments as part of the regeneration of the Old Vinyl Factory in Hayes – a site that was has been derelict for over 30 years.
Bridges has also been busy divesting assets from its previous property funds, the Sustainable Property Fund and the CarePlaces Fund. Across these two funds, Bridges has exited eight assets in the last 12 months, with IRRs ranging from 20 percent to 60 percent.
A notable exit for the firm was 158/170 Edmund Street, Birmingham, a vacant office building in Birmingham’s business district was refurbished and sold to F&C UK Property Fund for £11.5 million in December 2014, representing an IRR of 35 percent for Bridges Sustainable Property Fund.
Bridges also sold Elmbridge Court, Gloucester, a 44,000 square foot business park, which comprises 25 office buildings, before being sold to M7 Real Estate, generating an IRR of 23 percent.