Large falls in UK house prices are leading to buying opportunities for acquisitive funds.
London-based boutique fund manager, Managing Partners Limited, has snapped up 18 of 48 homes in one street in Portsmouth in the south of England and intends to buy another ten because prices have fallen so much.
In a statement, the firm said its open-ended British Opportunities Fund was acquiring the homes for as little as £89,000 (€106,000: $136,000) when the same properties were changing hands for as much as £205,000 two years ago.
“The fund has been able to purchase these properties from landlords who have overstretched themselves at prices that are as much as 40 percent below market value.” it said.
The Cayman Islands-registered British Opportunities Fund was launched in February this year and is administered by Taurus of Spain. It has returned 6.16 percent so far, and annualised growth of 12.71 percent against a target return for 10 percent. It has a mandate to buy commercial as well as residential property.
Jeremy Leach, an insurance expert and founder of Managing Partners, said in the statement: “In the current housing market we are able to pick up properties that are attractive investments at prices significantly below their market value.”
The firm said “deep discounts” were appearing, not least because many property funds were fully invested and had to dispose of properties to meet redemption requests from investors at a time when sentiment has cooled.
“We believe that the UK property market is providing one of the great investment opportunities of 2008,” added Leach. “We are seeing discounts to market value of on average 30-plus percent being offered on both private and commercial property at the moment, and in a leveraged fund such as ours, this means that we can produce high returns in a very short time.”