Augusta Capital, the listed property investor and fund manager, has bought a $92.8 million property portfolio, which it plans to pour into a new unlisted fund for investors next year.
The Auckland-based company bought two office and two industrial buildings, and will throw in an existing office block it owns into Augusta Value Add Fund No.1, giving it assets worth some $112 million, it said in a statement. The fund is expected to provide investors yield, with redevelopment or potential re-zoning and conversion opportunities to increase value.
The company put up $15 million in equity for the fund, which is fully underwritten by a group of high-net worth private investors, who contributed $45 million. The balance will be provided by a prime bank on a first mortgage basis, with the fund likely to be offered to wholesale investors by January next year.
The fund is "consistent with the previously identified strategy to broaden our funds management offerings to appeal to a wider range of investors and to give existing investors more choice, in addition to our typical offerings of single asset syndications," managing director Mark Francis said. "It will also assist in providing further recurring management fee income at a meaningful level."
Last month, the firm reported a 26 per cent decline in first-half earnings after a year-earlier gain after a syndication deal wasn't repeated. Augusta reiterated guidance that revenue from its funds management business would be volatile, depending on when it completed deals.
