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The property investment boutique you haven’t heard of

The property investment boutique you haven’t heard of

Barwood Capital may not be a familiar name, but in one form or another it has been around for 20 years.

With its focus in the golden triangle of England, the company originally started its life as a commercial property developer.  

Managing director Joanna Greenslade says that the unique selling point for the company is its experience and its focus on the regions rather than city centres.

‘So many of our investors struggle with sourcing the right deals and right opportunities,' she said.

'The second thing is our development roots. A lot of investors want to put money in an income-oriented stock but the development and planning skills we bring is quite unusual for investors.’

It was only around a decade ago that the business actually started offering clients funds they could invest in.

‘About 10 years ago we decided we needed to diversify the business so we expanded into residential development and into strategic residential land,’ she explained.

At the same time, the company was approached by high net worth individuals in the region asking for a solution to their return problems. That’s when the firm created an FCA authorised legal entity and began running collective investment schemes.

So far it has launched four property funds, raising over £200 million since 2009. Its latest fund in 2017 has raised £66 million to date, with the final close expected in the next three months. The minimum entry level for investors is £1 million.

  Returns (net of fees) Investment Strategy Capital employed Investor Base
2015 Growth Fund On track to deliver target 15% p.a Investor IRR over 5 years Regional commercial and residential sites with potential for intensive
asset management, development and planning
£100m est Major UK pension fund, UK charities, HNWI
2012 Growth Fund On track to deliver target 15% p.a Investor IRR over 5 years Regional commercial and mixed use sites with potential for intensive
asset management, development and planning
£50m Major UK pension fund, HNW
2009 Income Fund 12% p.a Investor IRR delivered, including 6% quarterly income return,
over 5 years
Regional commercial and mixed use sites with an existing lease in place
and potential for intensive asset management or development
£30m Local HNWI
2002 Growth Fund (managed within BDL) 20% p.a Investor IRR delivered over 3 years Regional commercial property development and asset management £12m Local HNWI

Source: Barwood Capital Corporate Brochure

Guy Brogden, who was recently appointed as executive chairman, describes the strategies as ‘private equity for property’.

‘Because we are focused on delivering development profit, we are much more creative than the average investment management group who are running an income fund,’ he said. ‘What we do is we buy property intelligently, which usually means cheaply and we add value to it by getting development consent or refurbishing.’

In the aftermath of the Brexit vote, when a lot of property funds struggled due to redemption requests, Brogden says Barwood’s experience was quite different.

‘All our funds at the moment are closed-ended. The big funds are driven by sentiment, we have a group of investors who are more sophisticated. They go on instinct, experience and that sort of thing. So when Brexit came along, they couldn’t get out even if they wanted to but we communicated with them and they were comforted by that.’

While finding the right opportunities and the property to add material value to is not an issue, attracting new investors is a challenge for Barwood. 

Greenslade said that the funds have a very loyal investor base however she added: 'The challenge which is a new one for us over the last year or two has been to break into the investment market and identify the route to market to bring new investors in.'

This is compounded by the challenges of regulation where people instinctively shy away from collective investment schemes, she said. However, wealth managers and advisers are starting to introduce those clients who are interested in property to Barwood, which helps overcome the challenge of finding new investors. 

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