Ronson forms £500m club fund

Gerald Ronson, one of the UK’s best known developers whose Heron International is backed by a number of wealthy US businessmen and Middle Eastern investors, has formed Ronson Capital Partners to buy UK real estate.

Gerald Ronson, one of Britain’s best known developers, has launched an opportunistic real estate club investment spin off, Ronson Capital Partners, to take advantage of UK deals.

The firm will be based at the headquarters of Ronson’s’ private development and investment firm, Heron International, and will invest in property on behalf of a club of “like-minded partners”, according to the Financial Times.

According to the report, RCP – as it is being called for short – has made a first investment. It has acquired an 80,000 square foot office building on Chiltern Street in London’s West End for £63 million (€71 million; $103 million), which has been sold by Targetfollow, a UK property company that collapsed into administration last year.

Jonathan Goldstein, chief executive of RCP, told the Financial Times that it would become a “significant name” in the property sector and a “club of which many will wish they were members”.

The firm will target mainly London, with the maiden deal seeing office space converted into high end residential property with some shopping use on the ground floor.

The firm has more than £500 million (€565 million; $818 million) to invest when co-investment by Ronson, Heron International, and equity commitments of club participants plus bank debt are added up, making it a mid-sized operator in UK opportunistic real estate investing.

Identities of the investment club members have not been revealed, though wealthy families and Middle Eastern soveriegn wealth funds including one from Oman are said to be backing the start-up.

Heron International itself is partly owned by US businessmen such as Michael Milken, who made a fortune in junk bonds, and casino magnate, Steve Wynn.

This is not the first time Ronson has reportedly amassed a significant sum to take advantage of real estate opportunities in the UK, however. In April 2008, the Sunday Times newspaper reported how Ronson had a £1 billion warchest through Heron International and wealthy investment partners.

That report said Ronson owned 25 percent of Heron while the rest is controlled by a group of American tycoons. The two biggest investors are trusts of Milken’s family and Oracle boss Larry Ellison, as well as Terry Semel, chief executive of Yahoo, Wynn and telecoms entrepreneur Craig McCaw.