Moorfield Group, the UK-focused real estate investment manager, has raised an initial £330m for MREFV – the latest fund in its flagship value-add series – and co-investment initiatives, so far.
The total equity raised came from institutional investors based in Europe, North America and Japan, including Moorfield’s first UK-domiciled investors (university college endowments).
Moorfield’s ‘hub-and-spoke’ model incorporates MREFV as the ‘hub’, with sector-specific side-car vehicles as ‘spokes’, that are seeded by the ‘hub’ and grown with additional co-investment funding from the MREFV investors or in joint ventures with other investors.
The first spoke to have been created is the private non-traded REIT (MREIT), which is investing in the residential-for-rent sectors (single-family housing for rent and student HMOS). MREIT, which was set up in 2023, has a target to reach value of £500m.
Moorfield plans to raise a further £250m for the spokes, with vehicles planned initially in self-storage and multi-family build-to-rent (BTR). The purpose-built student accommodation (PBSA), co-living, logistics, and industrial open-storage (IOS) also have potential for sector-specific side-car vehicles. In total, Moorfield is targeting £1bn of investment in the UK.
Moorfield was an early mover in many of these sectors, first investing in PBSA in 1997; independent retirement communities (IRCs) in 2008; BTR in 2012; self-storage in 2020; single-family housing for rent and student HMOs in 2021; and IOS in 2022.
MREFV’s most recent investment was a c.£150m, 440-apartment BTR development in Greater Manchester, supporting the delivery of much-needed new housing supply. This investment also signalled Moorfield’s renewed confidence to invest following its successful disposal program of all mature investments in 2021 and 2022.
Charles Ferguson Davie, Co-CEO and Chief Investment Officer at Moorfield Group, said: “Having sold our BTR, PBSA and logistics investments in 2021 and 2022, we now see an attractive re-entry point, as demonstrated by our recent investment activity, and we will continue to pursue our thematic focus on the living and storage sectors.
“All our target sectors are marked by an under-supply of fit-for-purpose product, low levels of institutional ownership and demographically-driven tailwinds that will help propel their growth through the coming cycle and beyond.
“Other managers are also looking at alternative real estate, but few share our track record or proven operational expertise.”
Since the launch of Moorfield’s flagship value-add fund series in 2005, the manager has raised c.£2 billion of discretionary capital from a global mix of institutional investors, including public and corporate pension schemes, endowments, multi-managers and banks.
From all realisations, Moorfield has achieved a weighted average IRR of 24 percent and a 1.5x equity multiple.
Marc Gilbard, Co-CEO and Executive Chairman, said: “Real estate is feeling the full impact of cyclical and structural change colliding, and while this creates opportunity, there is naturally a deep sense of uncertainty, so I would like to thank our investors who have placed their trust in us for this latest fundraise.
“Despite recent challenges, the UK remains one of the best places in the world to invest in real estate thanks to deep and liquid markets, which has allowed for a rapid repricing of assets.
“Beyond the diversification benefits and inflation-hedging qualities, investors in real estate know their capital has a positive real-world impact through funding the delivery of vital new housing and physical infrastructure that enables crucial economic activity.”