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Core-focused funds benefiting from safer status in turmoil

The change in the financial and investment landscape is actually improving prospects for some companies.

“We’re really seeing a massive change and actually more opportunities than we were seeing in November of last year and before, so yeah, it’s quite an exciting time,” said Andrew Smith, partner, Northern Horizon.

Copenhagen domiciled Northern Horizon is an independent property asset manager, currently managing four real estate funds.

“We are on to our fourth fund in the aged care space in the Nordics at the moment,” Smith explained. “We have a final close on that in mid-November and we’ve already raised about the same amount of capital as we did for the last fund,” he said.

This may be somewhat counter intuitive. “Capital raising in the current environment is very difficult and I probably think that reflects that this [aged care] space is perceived by investors to be somewhat safe,” he said.

“We’ve seen that happen before. Whenever there’s market turmoil there’s a flight to core. Our products are not value-add or opportunistic, we’re very safe – brand new buildings, long leases, ESG positive.”

He also added that the company is ranked number one or two in Europe for aged care funds. However, in November 2021 the market was in a different place. Northern Horizon had capital to spend but pricing was tough.

“That’s changed massively in the last couple of months, so we’ve seen pricing come out, we’ve seen access to deals that we just wouldn’t have had.”

He explained that this is because some of the vendors might be listed or have bonds coming up for refinancing.

“What we do is a very safe, very core sort of investment and we’re looking forward to seeing how it unfolds in the future.”

Please click on the video above to watch the full interview or listen to the podcast below.

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