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Bridges reaches first close for UK alts fund

The London-based firm has reached £120 million in a first close of a fund targeting property and property-backed operating businesses targeting niche real estate sectors.

Bridges Ventures, the London-based firm launched in 2002 that specialises in sustainability and 'social impact' investing, has raised £120 million (€147 million; $201 million) for a UK property alternatives fund.

Having held a first close on the Bridges Property Alternatives Fund, the firm is now over half way towards its total equity target of £200 million. Counting loans to help boost its fire-power, the company said it expected to be able to make around £500 million of investments in total, either directly or in joint ventures in property and property-backed operating businesses. It is targeting niche real estate sectors driven by “demographic changes” and consumer needs such as healthcare, education, SME business space and affordable residential accommodation, as well as other sectors where there is occupational demand in growth locations.

The fund follows on from Bridges’ previous real estate funds where realised returns have typically been at 20 percent-plus IRRs, it said in a statement. Most recently, the Bridges Sustainable Property Fund, which was launched in 2009, and which invested in properties in regeneration areas and assets demonstrating “environmental best practice”, exited The Curve, a student accommodation development in Whitechapel, East London. The development, carried out as a joint venture with UK firm, Chancerygate, was sold to investors via LaSalle Investment Management for £60 million at a 30 percent IRR, it said.

Bridges’ property funds have also invested in a range of healthcare developments with development partner, Castleoak, and has a £100 million portfolio of care homes capitalising on the growing demand for high quality health care provision to support the UK’s ageing population. It has also invested in low-cost gym chain pioneer The Gym, business workspace provider The Office and The Hoxton Hotel.

Simon Ringer, partner and head of property funds, called the £120 million first close of the alternatives fund “an excellent starting point” for transacting on deals.