Legal & General Property (LGP) has sold off the remaining assets of its first property fund, the UK Property Income Fund (UK PIF I), which invested in UK commercial property and which is now in the process of winding down. The portfolio was bought by an internal fund, LGP's Industrial Property Investment Fund (IPIF).
The assets in question are a portfolio of 47 trade park estates across the UK, which was sold for a total consideration of £176.5m ($252m), reflecting an initial yield of 6.1%. IPIF's assets under management (AuM), following this acquisition, is more than £1.7bn, L&G told Insurance Asset Risk.
UK PIF I launched in 2010 and closed to investors the following year, having gathered £300m ($428m) in equity from 14 international institutional investors.
LGP launched a second fund (UK PIF II) in March 2013. UK PIF II, which is meant to have a seven-year life span, closed to investors in May 2015 after having raised more £403m in equity, with a gross asset value of £610m when including gearing. It has acquired four properties so far, for a total value of £372m. It is expected to achieve a net internal rate-of-return of 8-9% for ungeared investors and 12-14% for geared investors.
LGP is the property fund management arm of LGIM Real Assets, itself a wholly-owned subsidiary of Legal & General Investment Management (LGIM). As of 30 September 2015, LGIM managed £717bn in assets on behalf of over 3,100 clients, providing products and solutions spanning all asset classes. LGIM Real Assets had an aggregate asset value of £19.9bn, and LGP managed £17.5bn in 17 funds or vehicles.