HOMEHibridge Capital's partners have invested in and managed affordable housing in London since 1996. In 2009, the Affordable Property Investment Fund ("API") was established to institutionalise Hibridge Capital's skills in the sector, establish a verifiable track record of performance and take advantage of the investment opportunity in this sector of the property market in London. Given that API's rental income is in effect paid by the UK Government, an investment in the affordable housing sector provides an attractive inflation linked alternative to investing in UK Government Gilts.
An investment in API offers the following :
- An actively managed affordable housing property fund focusing on a demographic and geography (London) that has good defensive qualities
- Delivering a target IRR of 9% with low volatility and limited correlation with other asset classes
- The fund will be investing in predominantly ex council properties with the following characteristics:
- positive spread of at least 1% between the external cost of funding and gross rental yield
- a mix of 1,2,3 and 4 bedroom flats with an average property value of £130,000
- located in London
- tenants will be students, local authorities, people on unemployment benefits, housing associations and key workers employed in health, education and community safety
- Demand for rented property in the fund's target market is underpinned by:
- reducing mortgage availability precluding first time buyers from home ownership and increasing the demand for rented property
- growing unemployment raising demand for affordable accommodation
- a rising number of single family households and down sizing in the economic downturn
- Supply of housing in the fund's target market is constrained by:
- restraints on government spending due to high levels of public debt and a budget deficit
- stricter lending covenants imposed on developers and buy-to-let landlords by banks
- limited space for the building of new homes in London
- Hibridge Capital has an over 19 year track record of investment in the affordable housing sector and its owners have together invested over £900,000 of their own capital in the fund
- Key investment terms and structure:
- minimum investment: £100,000
- 1% annual fee, 20% performance fee in excess of achieving the UK base rate
- maximum gearing 70% loan to value of property and 1.5x interest cover
- unauthorised investment in the shares of a BVI domiciled private company
- term of investment: 30 Sept. 2017 with redemptions only on a matched bargain basis
KEY FEATURES (PDF)