London-headquartered Osborne+Co has created a new investment management business model which is aggressive and ambitious with an eye on attracting lucrative investments from India for value-add investments.
UK-based real estate developer Osborne+Co has launched a new investment management business to target emerging value-add and development opportunities in the UK and Europe. Osborne+Co Investment Management (OCIM) said its aim is to become a natural investment partner for globally-focused high net worth individuals (HNWIs), family offices and pension funds in India, north and south-east Asia, Europe and the UK, who are looking for risk-adjusted European real estate exposure. Despite the economic headwinds stemming from the Covid-19 pandemic, the OCIM team believes a strong in-house delivery capability offered by sister company Osborne+Co can be uniquely leveraged to generate superior value and returns for its investors.
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Rajesh Budhrani, Co-founder and Head of Asia for OCIM, believes that despite the uncertainty surrounding the current market conditions, Asian investors remain keen on foreign direct investment (FDI) into the UK. Therefore, India is among the key target markets for the new venture, including plans for an India office in the pipeline for 2021.
Budhrani said: “Investors from the Indian sub-continent are very familiar with investing in UK real estate, in particular the residential buy-to-let asset class and second homes. Here, the yields are generally low. We, meanwhile, offer opportunities that can give a higher risk-adjusted return through value-added projects on both residential and commercial sectors.
“We set up each investment as a special purpose vehicle (SPV). It is transparent and attractive. We are looking for family offices who can invest as a limited partner - they own a stake but don't have to manage it.”
In reference to what makes the UK an attractive investment destination, Budhrani points to lower taxes and borrowing rates alongside transparent ownership laws.
Budhrani, a Director with Osborne+Co, is joined by its Co-Founder, Conor Osborne, and Rishi Khurana, formerly at Sidra Capital, to set up OCIM as a business focused on “intelligent underwriting and meaningful co-investment”.
“We have the agility of a dynamic start-up alongside the backing of an established sister company, Osborne+Co. Our investment focus will initially be to target core development and value-add opportunities across the UK and Europe, where we believe we are seeing an emerging disconnect in fundamentals and we anticipate value buying opportunities,” explains Conor Osborne, Co-Founder and Managing Partner of OCIM.
“The OCIM team brings a unique proposition with deep expertise across property development, construction and finance. Given our integrated knowledge and experience, we can navigate more complex transactions and secure investments with market-beating returns,” he said.
Under the investment strategy, OCIM says it will co-invest with its investor partners to deliver a hands-on and aligned approach focused on driving performance-defined returns, as opposed to a traditional fee-based model. The team says it has already closed three transactions this year, with a total gross development value (GDV) of over £300 million. Earlier this year, OCIM acquired two value-add commercial office assets in Milton Keynes, south-east England, with a view to repositioning them, as well as a 10-acre site in Dublin's Sandyford sub-market that is currently in its final pre-planning stages for a significant commercial office scheme.
In addition to taking over the management of several Osborne+Co investments and a number of other opportunities in the pipeline, OCIM says it expects to grow the GDV of its assets and projects under management to beyond £1 billion in the next 12 months.
Rishi Khurana, Co-founder and Managing Partner of OCIM, believes the focus is on a performance-based model and an entrepreneurial mindset, where OCIM succeeds when its investment partners succeed.
He noted: “We had to rethink asset classes and allocations. We realised we had to redefine how and where we focused on commercial offices as an asset class due to ongoing uncertainty around how the workspace will be used in a post-pandemic world.
“We took the view to reimagine our underwriting and pushed further than ever before the stress testing for a smaller and more selective spectrum of investment opportunities. For us, alignment and transparency are key, as we co-invest alongside our partners.”