Investec launches £250m real estate fund… But not for retail investors

Investec has launched a real estate equity fund with a target to deploy £250m over the next two years.

The strategy, called ‘REALIS,’ is aimed at institutional investors and high-net-worth individuals rather than retail investors.

Real estate funds aimed at retail investors have had a rough time in recent years, with open-ended funds seeing billions pulled from them by investors.

Last month, Legal & General Investment Management moved to shift its £1.2bn open-ended property fund to a hybrid model, while 2023 saw a raft of closures in the space.

The move to make the fund institutional-only may suggest that while the demand for property is there, retail is an unreliable market.

Investec said there were no plans to make the fund available to retail investors.

REALIS will be focusing on two key markets: Asset development or repositioning, with a focus on highly liquid markets, and distressed transactions, where the underlying investment benefits from strong long term fundamentals.

The real estate fund recently closed its first investment, acquiring a 45,5000 square foot office in Guildford. The transaction was funded with equity commitments from investors based in the UK and the Channel Islands, Switzerland and South Africa.

It is run by Yon Papageorgiou, head of real estate equity investments at Investec, who joined the firm in August 2022 from Twentytwo Real Estate.

Papageorgiou said: “What differentiates this strategy is the combination of Investec’s 30-year through-the-cycle track record, its data-led approach to investing and its unparalleled network of best-in-class operating partners.

“All of these factors mean we are uniquely placed to access off-market opportunities at attractive pricing and then execute a business plan that generates significant outperformance.”

Mark Bladon, head of Investec real estate, added: “Our equity strategy has been launched in direct response to demand from our global client base, who recognise the attractive total return characteristics that UK real estate can offer and the benefits of accessing it via one of the UK’s most active platforms, led by a highly experienced team.”

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