BlackRock raised GBP250 million or about EUR290 million of equity for its UK Long Lease Property Fund from six pension funds. UK Long Lease Property Fund is a new vehicle established by the firm to offer institutional investors more diversity in inflation-linked income streams.
The company said that the UK Long Lease Property Fund and its assets will be invested in alternative property assets around the UK. These alternative property assets include ground leases, student accommodation, housing associations, and primary healthcare. The fund will also be invested in some of the more traditional long-lease properties such as offices and supermarkets.
Blackrock said that the fund has already invested in excess of GBP100 million in real estate assets with a lease term of at least 20 years.
The fund was open to institutional investors only. The fund aimed for a 5% distribution yield and a monthly basis income distribution. The firm made the fund attractive to institutional investors who were trying to match their liabilities with inflation-linked income and pension funds.
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