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Nordics manager Northern Horizon exits care fund with 50% investor gain

Northern Horizon CEO Michael Schönach © D.R.

Nordics real estate investment manager Northern Horizon has sold its 30-asset Healthcare II fund invested fully in Finland to Helsinki manager Evli, saying the vehicle achieved a 50% capital gain on invested equity. The transaction values the portfolio at €140.8m.

The exit of Healthcare II, launched in December 2013, delivered a net internal rate of return of some 29% and an equity multiple of 1.7x to its investors, said NH, which was founded in 2001 and expanded in a 2011 in a merger between Copenhagen-based BPT and Finland's Evli.

Jussi Rouhento, Healthcare II manager and Northern Horizon’s Head of Finland, said the group felt that it was in investors’ best interest to dispose of the fund now. "The exit completes the story of one of the highest quality healthcare real estate portfolios in Finland," he said in a release. "The portfolio consists of new assets, 100% let on leases with an average remaining term exceeding 12 years. By exiting now we were able to achieve a 50% capital gain on the equity invested."

Andreas Michelsson, co-fund manager, added: "In terms of net IRR, the fund has surpassed its original goal by a factor of three while delivering the targeted equity multiple in less than half the expected time. From our point of view, the portfolio is currently at its peak and there was no more work for us to be done to further enhance the value."

Northern Horizon CEO Michael Schönach commented that the group's second care home fund exit again demonstrates its ability to deliver exceptional risk-adjusted returns. "The portfolio attracted strong interest from a diverse domestic and international buyer universe, highlighting the demand for the predictable and uncorrelated cash-flows from this demographically-driven real estate asset class," he said. But NH is far from leaving the senior and health care space. "We remain committed to our on-the-ground care home portfolio assembly strategy through our third specialised fund, the Nordic Aged Care Fund, which invests in our entire Nordic home market," Schönach added.

NH, which manages four real estate funds and two separate accounts for institutional clients, who comprise some of the leading financial and private wealth capital pools such as pension funds, insurance companies, banks, asset managers, corporate investors, charity foundations and family offices. In January 2016, NH acquired German asset and property manager OTUS which ran a mixed property portfolio across the nation.

JLL and Krogerus advised Northern Horizon on the latest structured sales process.

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