US backer sees UK residential as land of opportunities

Titlestone’s backer, US-listed Oaktree Capital Management, invests in European real estate either directly, via its global Oaktree Real Estate Opportunities Fund series – it recently began investing fund number six – or via its European Principal Fund vehicles. The third European principal investments fund, which funded Orr’s business, raised €3bn in 2011.

The opportunistic company likes UK residential and has made a string of well-timed investments in the recovering sector. As well as Countrywide, where the firm recouped £120m selling down part of its stake to 27.6% in an initial public offering in March, it snapped up 50% of the Cherry family’s housebuilder Countryside Properties last February.

The firm tried unsuccessfully to buy Opal three years ago (see pp10-12) but found  an entrée into student housing instead by setting up Knightsbridge Student Housing, which, despite its name, invests across the UK and in Spain.

Oaktree’s real estate funds picked off Lloyds Bank’s £625m Harrogate non-performing loan portfolio at a 60% discount and a stream of other UK assets in the past year, often with local joint-venture partners.

One of the latest is IQ Winnersh, a 1.4m sq ft M4 corridor business park, acquired with Patrizia (see profile, June issue) from Segro; former Segro chief executive Ian Coull is on Oaktree’s payroll as an adviser.