Max Property Group, a closed-ended company backed by investors including New York-based hedge fund Och-Ziff Capital Management, has completed an initial public offering on London’s junior stock market.
The London based company, which was set up to “exploit the current weakness of the UK real estate market”, has raised £220 million ($351 million; €252 million) upon completing its IPO and admission to AIM. On top of the £220 million raised predominantly from UK pension funds, Och-Ziff will invest an additional £25 million ($56 million; €40 million) of capital into the company and the management will invest a further £25 million.
In a statement to the stock exchange, Max Property said: “The company’s strategy is to exploit the current cyclical weakness in the UK real estate market through opportunistic investment and active management with a view to realising cash returns for shareholders over an investment cycle of approximately seven and a half years.”
Max Property Group is one of a number of investors that has raised funds to invest in the UK sensing that the market is near its bottom.
According to research by Real Capital Analytics, London has seen the most deal activity of all European cities with $12.4 billion in deals having closed in the last 12 months. Moscow has seen the second highest amount invested in that time with $7.3 billion and Paris has seen the third highest amount with $7.2 billion. The average yield in London in the last 12 months has been 6.4 percent compared with 9 percent in Moscow and 6.2 percent in Paris.
Max Property will invest over a five year period before looking to sell assets and return the proceeds to its shareholders.
The company is advised by Prestbury Investments which is 50 percent owned by Nick Leslau, a UK real estate investment veteran widely regarded as an early mover in market cycles.