Park Street, the European private equity real estate manager, has acquired a tactical equity stake in the Storebrand Optimér property fund, a Norwegian unlisted real estate fund managed by the asset management arm of Storebrand, the insurance and pension provider.
The investment in the unlisted fund, which is trading at an approximate 30% discount to net asset value (NAV), sees Park Street become the fund’s largest individual shareholder.
Park Street – founded by former EMEA Head of Mortgage and Credit Markets at RBS, Pradeep Pattem, in March 2014 – is seeking to act as an activist shareholder by providing liquidity to investors seeking an exit and positively influence the fund’s wind-up phase, which began last year.
Owned by a granular spread of retail investors, the Storebrand Optimér property fund owns three income-producing commercial properties, comprising:
- a 50% stake in the Raufoss Industrial Park, one of Norway’s largest industrial parks;
- a retail warehouse fully leased until 2019 to XXL Sport & Villmark, who have vacated and partially sub-let the premises to Elektro; and
- an office block for which the lease of anchor tenant Skarland Press, a Norwegian media company, expired on New Year’s Eve. A dental company also in the building has an option to extend its own expiring lease. Planning permission has been submitted for a reconfiguration of the property.
The value of Storebrand Optimér fund’s assets is NOK 1,073m (c. €111m) including a portfolio of European stocks and cash.
Hallur Thordarson, a partner at Park Street responsible for Nordic investments, said: “We have a strong focus on the Nordic market where we seek to work with existing real estate platforms, asset managers and bank workout units to provide solution oriented capital.
“Our focus is to provide liquidity for assets sitting in structural complexities or in the many funds that were put in place as tax structures for retail investors in the region.
“We see us adding value to the properties and funds where we can positively influence active asset management strategies and increase NAV. Park Street would be seeking a seat on the fund’s Board to work with the management team in driving value.”
Pareto Securities AS Norway, a leading independent operator in the Nordic market for financial services, acted as adviser to Park Street with Thomessen as legal and CBRE as property adviser.
The Storebrand Optimér investment is Park Street’s third in the last six months and is through Panther Leap I, a wholly-owned subsidiary of Panther Capital I, which is managed by Park Street Advisors.
The Panther Fund has a broader interest in the 2005 and 2006-vintage retail Norwegian real estate funds, many of which suffer from illiquidity arising from the deep discounts to NAV which the funds are trading at.
In August last year, Park Street acquired a portfolio of 14 German retail properties, which was the underlying collateral in a defaulted CMBS loan, dubbed the Lego Portfolio.
In November 2015, Park Street acquired Blackstone’s 25% stake of the Mapeley Delta loan, which is secured by a BT data centre in the UK along with a UK regional office.
The Panther Fund focuses on investment opportunities to provide liquidity to legacy loan and equity holders in the European structured real estate sector.
The Fund is targeting a final close later this year of $500m for deployment in off-market income-generating real estate, typically stressed through complex capital structures at between €20m to €100m across UK, Germany, Southern Europe and the Nordic countries.