Palmer Capital raises #85m

Palmer Capital Partners has raised £85m for its second Active Value Fund, of this £80m comes from investors such as Morley Fund Management, Foreign & Colonial, Hermes and CBRE Investors and the remaining £5m comes from Palmer Capital Partners and its investee companies. Palmer Capital Partners is a real estate private equity fund specialising in specific property or brown and greenfield development sites rather than trading businesses with a strong property element.

Structuring of the fund with its debt to equity ratio of 60:40 means the firm expects the final spending power of the fund to be around £225m once fully invested. Palmer Capital Partners Active Value Fund I raised £50m in October 2005.

The Active Value Fund II anticipates an absolute return of 12% across all deals, which will typically involve lot sizes of £40m and will be sourced through the various property companies in which Palmer Capital Partners holds an equity stake in the management company. These various property companies only receive a performance fee if they produce a return in excess of 10% on the deals they undertake, and they will also offset part of the profits they make from deals undertaken for the fund to underpin a total return to investors.

Active Value Fund II will be managed by Rupert Sheldon, a director of Palmer Capital Partners, who joined the firm from Henderson Global Investors in December last year.