Jameson Capital secured $25 million from two European cornerstone investors for a $100 million fund that will provide debt and take equity positions in real estate opportunities created COVID-19.
Last-mile logistics, childcare, seniors living, self storage, data centres, medium density residential housing and healthcare are being targeted for the so-called special situations fund.
As a secured lender will we will also share in exposure to any upside by taking a share of the profits at the end of the project”
“We’ll be making loans to asset owners in various sectors,” said Nick Browne, the co-founder and managing director of the Melbourne-based alternative asset manager.
“These might be assets purchased pre-crisis that require additional capital to develop or where there is support from a senior lender, but where there is a gap in funding.”
The focus will be on sectors disproportionally hit by coronavirus, such as seniors living and aged care and where there is an “attractive entry point” for the fund.
The funding will not be cheap. Interest rates will average around 18 per cent in addition to Jameson taking equity positions in assets it funds.
“As a secured lender will we will also share in exposure to any upside by taking a share of the profits at the end of the project,” he explained.
“We won’t invest in distressed assets, but we will look to partner with asset owners, where we see an opportunity, but perhaps where others don’t.”
Markets to Avoid
A key focus will be on avoiding markets where investors have gravitated “herd-like” such as the industrial market, pushing down yields and distorting the return balance.
“The popular idea of what is prudent has just been twisted to what everyone else does,” said Mr Browne, who previously worked in funds management at Macquarie specialising in alternative asset classes, real estate equity and debt.
The fund will aim to provide loans of between $10 million and $20 million, avoiding the sub $5 million market, where a large number of non-banks play, but below the $40 million to $50 million market where there is also a lot of competition among domestic funds.
Mr Browne said the fund aimed to make its first investments this month, after closing the initial funding round.
“There are quite a few pipeline assets we are looking at in Brisbane, Perth, Melbourne and Sydney,” he said.
“To our knowledge, we are the only fund of this nature offering a strategy diversified by both sector and geographic region targeting these types of strategic investment opportunities that have presented themselves following the crisis last year,” he added.
Jameson Capital was established in 2015 by Mr Browne and Jonathan Webster. Since its inception, it has invested over $300 million in private real estate investments in Australia.
