Patron acquires majority stake in Manchester arena

Patron Capital, the Europe-focused private equity real estate firm, has acquired a majority position in the Manchester Evening News Arena, the renown concert venue in Manchester, UK. The firm has made the investment in the 21,000 capacity venue via a joint venture with London-based Development Securities.

Patron Capital has acquired a majority stake in the Manchester Evening News Arena, a 21,000 capacity live entertainment venue in Manchester, UK.

The London-based firm, led by founder Keith Breslauer, has invested in the arena via a joint venture with Development Securities, the London-based real estate company. It has taken a 70 percent stake in the joint venture with Development Securities taking the remaining 30 percent.

The arena is one of the largest of is kind in Northern England and regularly hosts large music acts. In October, for example, it will stage rock band Guns n’ Roses. It also stages other live events such as wrestling and stand-up comedy. According to Development securities, it attracts more than one million visitors a year.

Development Securities originally purchased the arena from fund manager Capital & Regional for £62.2 million (€75 million; $92.1 million) in June shortly before agreeing a 25-year lease with tenant SMG. The entertainment group’s previous lease was due to expire in 2015.

The investment was subsequently placed into a joint venture in which Patron has made its investment.

Development Securities has been retained to undertake the asset management of the asset on behalf of the joint venture which has secured £47.5 million of debt from Lloyds Banking Group on a “long term” basis.

According to Patron, the joint venture marks something of a departure for Development Securities, which traditionally partners directly with institutional investors rather than alongside third-party capital managers.

Kevin Cooke, development director at Patron said: “This is an opportunity for Patron to own a prime asset with robust defensive qualities and considerable growth potential, in line with Patron’s investment strategy.”

Patron, which currently manages approximately €1.7 billion of capital, is currently investing from its third fund, Patron Capital III, which closed on €1.09 billion. The fund is currently approximately 55 percent invested.

The firm typically takes equity positions in its investments of between €30 million and €70 million in businesses with significant real estate holdings as well as in more vanilla real estate assets.