Schroder Property Investment Management, the asset manager with around £10 billion (€14.3 billion; $20.4 billion) of property, is launching its third UK-focused opportunity fund.
Michael Clarke, head of distribution, said Columbus UK Real Estate would seek to raise £250 million ($493 million) with a hard cap of £400 million.
The fund has already received commitment from UK domiciled investors, but Clarke is to spend time in the US to begin fundraising there.
He said: “We are going to the US for the first time. The reason is to get diversity of capital.”
The first two UK opportunity funds launched by Schroders were Gresham I and II. Gresham I, which was established in 2002 and raised £77 million, is 87 percent realized. It is achieving un-geared returns of 30 percent net of fees by investing in corporate asset backed deals and value added projects in which it typically worked up planning consent before exiting. Nearly all the investment has been in retail property.
Gresham II, by way of contrast, raised £150 million and switched focus to offices in London and the South East.
Clarke said: “We believe the UK market is re-pricing. The best strategy is an opportunistic one. We think there will be a bit of distress in the market, but we will still focus on planning/value added projects.”
London-based Joe Froud will be the fund manager for Columbus.
Schroders has had Canadian limited partners in previous funds, but never any from the US.
For more on Schroders’ latest vehicle see this month’s issue of PERE magazine