The West Midlands Pension Fund has backed a UK secondary real estate strategy managed by .
The UK pension fund has seeded Kames Capital鈥檚 closed-end UK Active Value Property Fund II with 拢50m (鈧�59.1m).
The seven-year fund 鈥� a follow-on vehicle to its UK Active Value Property Trust 鈥� is targeting a 拢250m raise.
Mike Hardwick, head of alternatives and fixed income at the West Midlands Pension Fund, said the UK secondary property market offered an attractive and stable income yield.
The investment comes just over one month after the UK voted to leave the European Union.
Kames Capital said the result of the referendum was leading to high levels of volatility in the UK commercial property market, providing opportunities for active investors to acquire good-quality secondary assets.
Philip Bach, who will manage the fund, said Kames Capital believes there are opportunities 鈥渘ewly available from the fallout of the Brexit vote鈥� 鈥� outside of the prime London hotspots.
鈥淭here remains a lack of supply for good-quality properties outside of London after the last property cycle,鈥� he said.
A spokesperson for the West Midlands Pension Fund said it recognised the potential to capitalise on relevant opportunities in the real estate market.
The fund said that, in the run-up to the vote, increased volatility had been predicted.
Activity in the smaller lot size, it said, has 鈥渞emained consistent throughout the recent market turmoil鈥�, and the UK鈥檚 occupational market continues to be healthy.
Bach said Kames Capital鈥檚 focus would be on properties in the 拢5m-15m price bracket 鈥� 鈥渢oo big for most private buyers but too small for most institutional investors鈥�.
The manager will look to maximise opportunities through new leases or tenants, refurbishment and redevelopment.
