Pramerica to launch UK open ended fund

The US firm reveals its first UK dedicated strategy saying it hopes to build a portfolio with ‘low levels of depreciation’ and ‘volatility’.

Pramerica Real Estate Investors has unveiled its first offering in its UK-focused strategy by launching an open ended fund.

Pramerica UK Real Income Fund will invest in a portfolio of UK commercial real estate assets with low levels of depreciation and volatility across selected property types, it said.

This is the first UK-dedicated strategy announced by the European real estate investment part of US giant Prudential Financial.

“The team is looking to provide investors with core stable income-oriented returns that provide the potential to track and exceed the UK Retail Price Index by between 4 and 5 percent, after fees and expenses,” it said.

A minimum of 50 percent of the assets will be leased to companies with low credit risk on long leases with RPI or fixed increases in income.

The fund will be marketed primarily to institutional investors in the UK. It could reach a size of £500 million (€552 million; $808 million) over the next five years.

Pramerica’s newly established UK real estate team will manage it. Paul Dennis –Jones, Charles Crowe and Andrew Grigson joined Pramerica in early September and were part of the core group that managed the UK funds sponsored by UBS Global Asset Management.

Pramerica began activities in Europe in 1990, is headquartered in London and has fund management operations in both London and Munich.

Charles Crowe, head of UK transactionns, said in a statement: “The next 12 months or so will present a large number of compelling buying opportunities.”