November 17, 2009 / 9:32 AM / 10 years ago

Aegon to launch healthcare property fund

LONDON (Reuters) - Aegon Asset Management is looking to raise 300 million pounds of equity to launch a fund inspired by Britain’s ageing population and a surge in demand for care homes and healthcare property.

The Aegon Target Healthcare Property Unit Trust is the first fund devised by AEGON since the arrival of its property team from Aviva Investors in 2008.

The five-year, closed-ended fund will be 50 percent geared and is open to investment professionals with a minimum subscription of 5 million pounds. It is targeting a 14 percent internal rate of return on a geared basis.

The majority of investment will be in newly built care homes, but the fund may also invest in sub-markets such as day surgery units, critical care facilities, dementia care and learning difficulty units.

Selected properties will be let to tenants with strong balance sheets, on 25-year plus leases with annual rent uplifts.

“There is a growing demand for healthcare facilities in the UK as the post Second World War Baby Boomers retire and their healthcare needs increase,” Aegon Asset Management property director Phil Clark said.

The Office of National Statistics estimates there will be 2.85 million people living in Britain aged 85 years or older by 2031, feeding into long-term demand for retirement homes and privately-funded healthcare property.

(Reporting by Sinead Cruise; Editing by Andrew Macdonald)

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