The Longcross Property Investment Fund will invest in a mixture of residential and commercial property and will seek to generate a net return of at least 9% per annum over a five year period.
The Oeic will begin investing once it has reached a target of £10m, but has an initial target of £55m, and will be managed by an investment committee comprising property specialists John Hardman, James Sunley and Dominc Hayes.
Ripley Asset Management has also been instructed as the fund’s property investment managers to work alongside the investment committee.
Within the commercial portion, the fund will exclusively target assets located in high quality locations, with existing A and AA rated tenants with 10-15 year lease lengths. These will be split between high street retail, industrial units and office accommodation.
On the residential side, the fund will target assets in well-located, high quality developments with the emphasis on three to four bedroom family houses rather than apartments, although not exclusively. It is intended that the properties will be acquired from distressed vendors, house builders and residential investment companies.
The managers have already agreed gearing with Santander, Barclays and Nationwide of between 50-60% of the fund’s value meaning the fund will be well funded from the outset.
Adam Nettleship of Longcross said: “Having first come up with the idea for this fund in April 2006 when there was speculation that residential would be a permissible asset within a Sipp we feel that now is the right time to launch and to invest.
“Asset prices for both commercial and residential property have come down considerably since their highs of 2007 and we believe an open-ended structure like this gives investors a real opportunity to participate in this opportunity.”
The fund is available through most offshore platforms, has a minimum investment of £10,000, an initial charge of 1.5% as well as an annual charge of 1.4%. There is also a performance fee of 20% once the hurdle rate of 9% has been reached. Advisers will receive commission of up to 3.5%.
