Henley launches £400m debut fund, targets 5% return

The UK-focused firm is targeting supported-living housing for vulnerable adults for its inaugural real estate vehicle. 

Henley Investments has launched its debut real estate vehicle and has completed the first acquisition on its behalf.

The Surrey, UK-based private equity real estate firm is targeting a capital raise of £400 million ($443 million; €520 million) with a hard cap of £600 million, to invest in supported-living housing assets.

Henley said it hoped to complete fundraising for the vehicle, Henley Secure Income Property Unit Trust (SIPUT), within the next six months.

The core strategy, long-term income fund is expected to have a lifespan of 25 years and Henley is understood be aiming to generate at least a 5 percent annual cash dividend for its investors.

Henley said it would be focusing on the “underserved but fast growing” supported housing sector, targeting residential investments across the UK for the provision of long-term homes for vulnerable adults. The firm said it would seek to acquire assets with long-term leases, whose rents are met through housing benefit from the UK Government.

In addition to the fund launch, Henley has also completed the first deal on behalf of SIPUT, the £70 million acquisition of a portfolio of supported-living properties. The portfolio is comprised of 49 UK-based properties, which were acquired off-market, and, Henley said, were already generating income with an initial yield in line with firm’s expectations.

Henley has considerable experience in the supported living sector, having worked with local authorities and the NHS since 2012. Over the past four years, the firm has undertaken a number of key transactions through its Henley Healthcare platform, totaling approximately £250 million.

Speaking about the firm’s debut fund, Ian Rickwood, chief executive officer of Henley, said: “With growing demand in the supported living sector, there is a significant need and market opportunity, matched with increasing institutional interest in the space.”

“We offer these institutional investors access to long-term inflation linked secure and sustainable returns, as well as providing much needed homes for vulnerable adults, making a positive difference to people and communities,” Rickwood added.

Established in 2006, Henley focuses on development, investment and asset management in the commercial, residential, healthcare and real estate debt markets. Over the last 11 years, the firm has deployed around £1.5 billion of capital in the UK, the US, Germany and the Netherlands.