Seneca, the £500m investment house based in the north west, has launched a property investment product.
The new mandate is run by Jeff Morton, an industry veteran, who previously worked on the £3bn BlackRock UK Property fund.
He told FTAdviser that the offering is not, at present, structured like a fund, instead each individual property deal will be held in its own special purpose vehicle, and investors can choose to invest in any of the individual vehicles to access particular properties.
Some of the investments will pay a relatively high yield, running through the range to products that may not have a yield at the time of purchase.
Mr Morton said the focus of the investments will be in the North of England, “by which we mean north of the Midlands”, as he feels there is less competition for assets there.
He said: “A lot of big funds are run by people who are kind of lazy, and stick to the south east, which means there is a lot more capital chasing assets there.
“We are agnostic about the sectors we will look at, but we feel the opportunities are in the north.”
Seneca Investment Management is based in the north west of England.
He added the “sweet spot” in terms of deal size for the firm will be between £2m and £12m.
Mr Morton said: “That level is probably just outside the reach of individual high net worth investors, and too small for the bigger funds, so there is an opportunity there.”
He said the fees would be competitive at the “market level.”
The minimum investment required is around £50,000.
Last year, many open-ended property investment funds were forced to close to redemptions in light of the uncertainty that followed the European Union referendum result.
Mr Morton acknowledged that liquidity is lower with direct property investments than with equity or bond investments, but he claimed the higher yields compensate investors for this.
He is invested in the new product himself.
The first £20m investment has been made, buying six “branded business centres” in the north west of England. Those centres have 200 tenants in a mixture of industrial and office units.
Patrick Connolly, chartered financial planner at Chase De Vere, said: “Seneca is a growing business which is looking to diversify its product range.
“There is ongoing investor demand for commercial property investments, although this is a competitive space and Seneca is competing against some good quality property managers.
“Their property offering would need to be more established and much larger before we would consider investing our clients’ money.”
david.thorpe@ft.com
