Private equity real estate firm Palmer Capital Partners is planning to raise a £75 million (€82.5 million; $103.9 million) fund aimed at investing in small sized deals from distressed sellers and banks.
The directors of the firm, led by Ray Palmer, alongside approximately 30 directors from property services firm GVA Grimley, are to invest a combined £2m into the vehicle, called The Palmer GVA Property Fund. The remainder of the equity is to be raised from institutional and private investors. With debt, the fund is expected to reach £75m in size.
It is the second time in the space of a month that a property services firm has formed a joint venture to co-manage a property fund to buy in the UK, a market widely believed to be near reaching its bottom in terms of real estate values. Last month, Strutt & Parker teamed up with UK property company Sovereign Land to launch a UK retail property fund targeting £300 million in equity.
The Palmer GVA Property Fund is to be set up in the second half of the year. It has been set a target return of 12 percent a year over a five year term.
The fund aims to invest using equity at first and then adding debt later. The minimum size for any one investment by the fund will be £100,000.
Palmer Capital Partners will be the fund manager while GVA Grimley will be the property manager of the fund’s assets. Asset management will be undertaken by nine regional property companies in which Palmer has provided venture capital. These include Wrenbridge, the Midlands-based developer.
It has been set a maximum debt ratio of 65 percent loan to value.
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