UK-based alternative investment and asset management business, Chaucer Alternative Asset Management (Chaucer AAM), is back on the fundraising trail five-years after attempting an ambitious fundraise that ultimately did not materialize.
PERE has learned that the group, founded by entrepreneurs David Nun, Andrew Priest and Scott Knight, is once more targeting €3 billion for a vehicle it is calling The 1392 Real Estate Fund II, even though the original 1392 Real Estate Fund failed to attract a single penny. Sources close to the firm suggested to PERE that the firm was hoping to corral investments of up to €200 million each from up to 15 committed institutional investors for a core, value-add and opportunistic investing strategy.
Similar to the strategy of the first vehicle, this next fund is also expected to be invested in offices and retail in cities across Europe. Target markets are understood to include London, Chartres, Rome, Thebes, North Cumberland, Yorkshire, Saluzzo, Flanders and Tours as well as home city Canterbury.
Chaucer AAM, which is based in Canterbury in the UK, sought to raise €3 billion for a real estate fund targeting investments across major European cities back in 2010, during what was a particular challenging fundraising period. It tried to raise the fund alongside smaller vehicles for private equity and infrastructure strategies. These too did not get off the ground, however.
But with a seemingly ever-growing wall of capital chasing real estate in urban centres across Europe, it is thought the leaders of the firm have decided now is the best time to dust down their old real estate fund offering. It is understood there are no plans to do likewise for its private equity and infrastructure strategies.
Indeed, PERE sources report that they have been buoyed by the strengthening global liquidity of the marketplace thanks to low interest rates and an expansion in quantitative easing. Chaucer AAM also is said to believe that, since equities remain volatile and bonds offer little yield, investor demand for real estate will increase which is why it has come back to market with an offering.
Nonetheless, Chaucer AAM is entering a competitive marketplace and in 2014, for the first time in the past seven years, more capital was raised for European private real estate than for any other region, according to PERE’s in-house Research & Analytics division. European funds raised $22.6 billion in 2014 – an 83 percent increase on 2013. 70 European vehicles closed in 2014 – the most since 2008 – and the average fund size for European vehicles was $576.31 million, the highest average for the region over the seven year period.
Chaucer AAM declined to comment.