Denmark’s largest private pension fund has made a £50 million (€57 million; $75 million) commitment to the new £650 million pan-European opportunistic real estate fund being raised by London-based fund manager Resolution Property, PERE has learned. The commitment to Resolution Real Estate Fund IV has been made by PFA Pension, which boasts 280,000 pension clients, employs 1,200 staff and is in the early stages of diversifying its €2.2 billion property portfolio by making international investments.
Michael Bruhn, the former head of the Nordic region for Valad Europe and newly installed managing director of PFA Real Estate, today confirmed the investment had been made. It comes one month after it emerged that PFA was in the latter stages of penning an investment to a UK-based manager of an opportunity fund. Indeed, in an interview with PERE in June, Bruhn revealed thatb the Danish pension was nearing the signing of a fund commitment managed by a firm in the UK, although he declined to identify the manager until the deal had been completed.
News of the commitment comes as Resolution inks the first deal for its new real estate fund, which it launched in September with a £650 million target to deploy in value-added investments involving asset management angles.
Tomorrow, Resolution is set to announce it has bought a property in London known as the “Harrods of the East” in a previously overlooked part of London, east of the city’s traditional financial quarter, that is only just coming onto the radar of institutional real estate investors. According to the firm, it bought the 100,000-square-foot former department store at 69 to 89 Mile End Road for conversion into a £30 million mixed-use media hub for the “East London creative community.”
Resolution has paid a private vendor an undisclosed sum for the property, located close to Shoreditch and the City and within 200 metres of the forthcoming Whitechapel Crossrail station that is part of a £12 billion infrastructure project. The landmark early 20th Century building originally was built as Wickhams department store and earned the nickname the “Harrods of the East.” Current tenants include supermarket group Tesco and Sports Direct.
Resolution plans to work on proposals for an extensive refurbishment to provide a mix of office, residential, retail and leisure space, aimed at extending East London’s “creative and digital quarter” beyond Shoreditch and Old Street. The firm noted that the media-hub project is a continuation of Resolution's investment program within London's so-called “creative office” sector. It follows the acquisition and refurbishment of The Bonhill Building in Shoreditch, which is now the headquarters of Mind Candy, one of the world's fastest-growing social online gaming companies, and Resolution’s on-going Alphabeta scheme, the 240,000-square-foot reconfiguration of Triton Court.
Robert Wolstenholme, director of Resolution Property, said of the deal that the Whitechapel area in East London was a logical extension of the Shoreditch tech cluster “as the centre of gravity for London’s digital economy continues to move eastwards and Crossrail becomes a reality.”
Robert Laurence, chief executive of Resolution, added: “This is an excellent first acquisition for Resolution Real Estate Fund IV. It’s a well-located, income-generating asset with the potential to deliver value through proactive asset management.”
Resolution was founded in 1998 by Laurence and an investment team from UK property company Argent Group and is historically backed by US limited partners such as Hewlett Packard and Stanford Management. MN Services is thought to be among the European LPs in previous funds. Its second fund closed in 2004 on £330 million (€492 million; $600 million based on that year’s currency exchange rates), but it nearly doubled the size for its follow-up effort at the end of 2007 as it closed on €808 million.
Resolution declined to comment on its fundraising activities. Its advisor, Hodes Weill & Associates, also declined to comment.