Member Article

New Kames Capital property fund gets eight-figure seed funding commitment

A new property fund managed by London and Edinburgh-based Kames Capital has received £50m in seed funding from The West Midlands Pension Fund which will look to take advantage of Brexit-induced uncertainty in the property market.

The Kames UK Active Value Property Unit Trust II has a fundraising target of £250m and will be tasked with acquiring good-quality secondary assets as it takes advantage of falling property prices due to any economic instability stemming from the EU referendum in June.

It is the successor to Kames’ UK Active Value Property Unit Trust vehicle which closed in December 2014 and raised £270m for investors.

Focused on properties in the £5m-£15m bracket, the fund manager will take advantage of its property team’s extensive industry contacts to hunt out off-market deals.

The fund has already offered on a portfolio of four properties that another fund is looking to offload.

Commenting on this new investment and current state of the market, Mike Hardwick, Head of Alternatives and Fixed Income for the West Midlands Pension Fund, said: “The UK secondary property market offers an attractive and stable income yield and provides an effective complement to our existing core real estate holdings.

“We were attracted to Kames Capital’s active value approach and the depth and quality of the team behind the new fund.”

Shaun McWilliam, Kames Capital’s head of institutional sales for property at Kames, added: “Our active value strategy focuses on good-quality income, enhanced through active management and offering the prospect of positive rental growth.

“We are delighted that the highly respected West Midlands Pension Fund has agreed to seed the new fund, demonstrating confidence in our property investment team and the positive investment case for secondary property.”