New capital required as more than 75% of investors vote to extend fund
Henderson Global Investors needs to raise about £200m of fresh capital for its UK Shopping Centre Fund after investors voted this month to extend the fund’s life.
More than the requisite 75% of investors voted to extend the £645m Jersey property unit trust by seven years, from its original 2014 closing date, to 2021.
A redemption window was opened until 20 July and some investors who voted to stay in the fund also opted to reduce their holdings, along with investors who voted against extending. There is now a 12-month period running to try to match them with new investors.
Andrew Friend, Henderson’s director of institutional business, said capital will also be needed to implement business plans for the fund’s investments and to invest in new assets.
Friend said fund manager Myles White had worked with 15-20 managers representing more than 50 investors for 12 months on the restructuring, and as a result had introduced changes including a second redemption period in 2017.
A seven-member investor advisory committee is being set up and a clause on first rights of additional equity investment to existing investors introduced. Law firm Nabarros was available to work with all investors during the process.
“If 40% of investors had voted to redeem we would have wound up the fund,” Friend said. “Some investors didn’t have mandates to stay in, or strategically aren’t investing in funds.” Many investors are voting for fund terminations, with at least 11 so far this year.
Grosvenor is selling the single Basingstoke asset in its Festival Place fund and assets in the Grosvenor Shopping Centre Fund, after investors voted down proposals to extend them.
Friend said: “You have to have top-end assets in this sector, provide the environment and support to get liquidity, and be very focused on your investors’ intentions and desires.”
The Henderson fund’s assets are shares in the BullRing, Birmingham; Buchanan Galleries, Glasgow; St James Centre, Edinburgh; and the Whitefriars centre, Canterbury.
It has low gearing, at 10.7%, and a net asset value of £586m. Friend said existing investors were the buyers of £50m of units sold via CBRE’s PropertyMatch platform earlier this year.
Expansion is on Horizon in France
Henderson hopes to double its €570m of managed assets in France after buying six-strong asset manager Horizon France.
Henderson’s local office already manages a €110m French logistics fund – a mandate for a Middle Eastern investor – plus French assets in the pan-European Herald retail fund and others owned by Warburg Henderson KAGs.
Mike Sales, global property MD and CIO, said: “Our goal is to sell domestic products to domestic investors, as we have in Germany and Austria. France is the next biggest market.” Henderson opened an office in Stockholm this year, run by Johan Aström, as part of its plans to expand in the Nordics.