Threadneedle planning £300m RE fund

About to hold a second close on a £100m vehicle, the UK firm is already planning a larger vehicle to launch in July.

London-based property fund manager Threadneedle is about to hold a second close on a £100 million ($200 million) property fund, Threadneedle Property Unit Trust, according to fund manager Chris Morrough.

The fund held a first close on the leveraged opportunity fund, which is designed to exploit depressed pricing and expanding yields in the UK market, three weeks ago at £30 million.

Though the size may be small, it is meant to test the waters for a larger fund the firm is looking to launch in July raising £300. That fund would also take advantage of the downturn in the UK commercial property sector.

“We haven’t done these funds for a period because it wasn’t the right time,” Morrough said. “But now with the recent movement in the markets over the past couple months we think the time is right to recreate the success we had in the past.”

The larger fund would have a five to seven year lifespan and would have a target return between 12 and 15 percent. Threadneedle would look to start making acquisitions at the end of 2008.

Morrough said he sees signs of the pace of the UK property downturn slowing and leveling out, seeing monthly movements lower than what was being seen in November and December. Morrough added that he anticipates seeing funds with withdrew from the market in the middle of last year to start investing again.