Investors reach exit via asset sales as Henderson fails to extend Caspar’s life

Investors in the Henderson Caspar Property Fund finally exited their investment this month, in a tense finale when the fund’s remaining 24 assets were sold to a Mountgrange/Patron Capital joint venture.

Henderson’s efforts to restructure the fund were hampered by high gearing and the fact that most of the debt against the portfolio was securitised.

In 2009 and early 2010, several attempts to get note-holder consent to waive the 75% loan-to-value and asset sale covenants were either voted down or stymied when meetings  were inquorate.

Subsequently, 37 of the original 61 properties were sold, in every case meeting the allocated loan amount. Mountgrange and Patron Capital – which is investing  for its new, fourth European opportunity fund – paid £184m for four Jersey property unit trusts containing 24 high-yielding retail, office and industrial assets.

The buyers subsequently sold seven properties to CBRE Global Investors and one to F&C Reit. They financed the acquisition with £55m of senior debt from Santander.

The deal was completed as the £171.46m Epic Caspar CMBS was due to mature and a vote on a six-month standstill extension took place.

The outcome of the vote only emerged after the portfolio sale went through – and was a rejection. Noteholders will now be repaid in full.

Martin Payne, who replaced Andrew Creighton as Caspar’s fund manager, said the process had been “tense and challenging, between managing the  debt expiry at the same time as trying to conclude a very complex disposal transaction”.

Drivers Jonas Deloitte and K&L Gates advised Henderson.