Hedge Fund Beats Private Equity Giants To Buy £940M Portfolio

An activist hedge fund has teamed up with a property asset manager to buy a £940M UK portfolio in one of the largest British real estate deals since the onset of the pandemic. 

Elliott Management is backing Oval Real Estate to buy the entire portfolio of the Janus Henderson UK Property PAIF, React News reported. The fund is dissolving itself and returning cash to the thousands of small private investors that own it. 

Elliott is best known as an activist investor that buys stakes in listed companies, then pushes management to change strategy to boost the share price and make a return. It is currently pushing the board of housebuilder Taylor Wimpey to find a new chief executive from outside the organisation.

Oval is best known for promoting a major development scheme in the Digbeth area of Birmingham. 

Janus Henderson UK Property is an open-ended fund for small private investors managed by Nuveen. Like many such funds, investors wanted to pull their money out in the wake of macro-economic shocks like Brexit and the coronavirus pandemic, meaning the fund needed to sell assets to return cash.

Rather than doing so on a drip, drip, drip basis, earlier this year Nuveen appointed CBRE to find a buyer for the entire portfolio, which would be sold and cash returned to investors.

Oval and Elliott saw off competition from Ares Management, Blackstone and Starwood to buy the portfolio, React reported.

A fact sheet for the fund said that 35% of its assets are in the industrial sector, 18% in offices and 17% in cash, with the rest a mix of other asset classes.

Its largest asset is the Capital Business Park in Cambridge, which could be repositioned as a life sciences asset. The portfolio also includes a former John Lewis department store in Croydon.