Stenham property fund launch looks to exploit gap in office market

Stenham, the alternative investment manager, has launched an ‘opportunistic’ commercial property fund which looks to exploit a gap in the UK multi-let office market.

The fund has a closed-ended structure with a targeted rate of return of 12% to 15%.

Stenham’s first UK Property Portfolio, which raised £36 million when it launched in 2004, had suffered a loss of 17% in its net asset value up to 30 March this year as the credit crunch hit performance.

The fund will be run by Stenham’s 30-strong property investment team and will target its high net worth clients, although it is also open to the wider retail and institutional markets.

Stenham runs £1.67 billion across its property portfolios and hopes to raise between £100 million and £150 million for its latest fund.

Managing director Paul Arenson said the focus on the multi-asset office market is due to less competition in this sector.

‘It’s quite an opportunistic fund,’ Arenson said. ‘Primarily we are targeting multi-let offices with potential to add value through an asset management team. What we are aiming for is low-risk capital opportunities per square foot with ability to enhance existing income streams.’

Arenson added that since Stenham’s customer base is predominantly private high net worth clients, the way it runs money is innately conservative, demonstrated by the company’s decision to start exiting UK property in 2005.

‘The ethos of our investment approach is to first and foremost preserve capital and then trying to get good returns on that capital is the next consideration.’

After a tough two years, Arenson is reasonably bullish about the future.