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Octopus raises another £58m

April 24, 2019

Octopus Healthcare, a major specialist UK healthcare real estate investor, has raised £58.8m on the back of growing demand from institutional investors for the asset class. The fundraise saw investment from both new and existing institutional investors.

Octopus director Ben Penaliggon said the care home sector had strong market fundamentals, due to the growing demands of an ageing population against the backdrop of a shortage of quality real estate.

“At a time when some sectors are experiencing challenges and uncertainty, healthcare continues to attract institutional investment,” said Mr Penaliggon.

“Octopus Healthcare continues to build strong partnerships within the care home sector, driven by a commitment to creating the exceptional healthcare facilities this demographic of society needs.”

In a recent interview with Caring Times, Mr Penaliggon said the Octopus Healthcare Fund sought to offer investors diversified exposure to the UK healthcare real estate sector, primarily to elderly care homes, in an unlisted vehicle, and a return driven heavily by the income, which in most cases is index-linked and therefore highly attractive.

“Our investors tend to be pension funds, domestic and international, which has been the case throughout the two funds we have launched, and it’s interesting that we are seeing good demand from both those cohorts,” he said.

“At the moment, roughly three-quarters of our fund is comprised of UK investors, with a quarter from overseas, but I think the overseas component will increase.”

Hiti Singh, head of institutional investment at Octopus, said investors were increasingly looking for alternative asset classes to expand or diversify their portfolios.

“Healthcare real estate offers a compelling combination of attractive fundamentals driven by an ageing population and long-term income, together with the social benefit of providing first class and modern accommodation for elderly people needing care,”he said.

The team behind the fundraise has a 15-year track record investing in healthcare real estate. Octopus Healthcare has secured more than £267m of transactions into the UK elderly care home sector over the last 12 months, through a combination of standing investments, forward fundings and forward commitment acquisitions.

In addition to UK care homes, Octopus Healthcare can invest in specialist healthcare facilities. As well as an in-house development team, Octopus Healthcare also has a clinical assurance team which provides its tenants with access to the latest regulatory information and best practices. Octopus Group currently manages more than £1.7bn of institutional funds, from a total of more than £7.7bn in funds under management.

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