Special Situations Fund will turn around London and South East assets
Melford Capital Partners raised £125m at a final closing this month for a UK value-added fund. It is understood that the dozen or so investors in the eight-year UK limited partnership are mainly university endowments, charitable foundations and family offices from the UK and US.
The fund’s size was capped at £125m and was oversubscribed. Melford aims to establish smaller funds to pursue a low-volume, focused approach to investing. Lazard advised Melford as placement agent.
The Special Situations Fund is a ‘turnaround’ fund that will look for depreciated assets with potential for improvement in London and the South East of England, across all sectors.
It is understood that the principle measure of returns will be an absolute cash multiple, rather than a benchmarked internal rate of return.
The fund will buy assets for cash, potentially adding gearing only to amplify, not achieve, returns. It will also consider investing via joint ventures.
Melford Capital Partners was founded by the four partners: Harry Hart and James Osborne from Melford Capital; Ludo Mackenzie from Henderson Global Investors; and Freddie Wingfield Digby from Barclays Capital.
Patrick Bushnell, former head of property investment at Henderson, is non-executive Chairman. The fund was launched in 2009 and acquired its first asset in May last year: the Hog in The Pound pub at 28 South Molton Street, purchased from the receivers of Kenmore.
The property, let to the Capital Pub Company with a rolling landlord’s break, will be redeveloped as a prime shop with offices and flats above. Melford declined to comment.