Merseyside Pension Fund is among investors in a real estate fund that will focus predominantly on distribution warehouses in the UK.
The UK pension fund has committed capital to Barwood Capital’s UK regional property fund, which raised £42m (€48.1m) in a first close.
High-net-worth individuals and family offices also invested in what is Barwood Capital’s fourth fund.
The fund will focus on markets outside London and deploy 70% of its capital in distribution warehouses.
The balance will be invested in alternative sectors and offices in high growth and undersupplied locations, with a limited allocation to small residential sites where housing demand continues to outstrip supply.
Barwood Capital will seek distribution warehouse sites it identifies as having potential to add value through planning, development and asset management.
Joanna Greenslade, managing director at Barwood Capital, said industrial and logistics “was the best performing commercial property subsector in 2016 and is widely regarded as having the strongest growth prospects across all sectors over the next five years”.
She said: “This is driven by the unprecedented occupier demand we are seeing for distribution warehousing due to the move to online retailing, as well as structural changes in the supply chain across all sectors changing the way we buy and are supplied with both raw materials or finished goods.”
Barwood Capital will aim to deliver a net internal rate (IRR) of return of 15%. It delivered a 12% IRR from its first fund, the Income Fund launched in 2009.