Brandeaux sells Liberty Living to Canada Pension Plan Investment Board

Brandeaux has sold its troubled property portfolio, Liberty Living, to the Canada Pension Plan Investment Board for £1.1bn allowing it to return nearly all of its shareholders money.

Portfolio Adviser


Following the sale, directors at Brandeaux, a student accommodation fund manager, said they intend to make an initial compulsory pro rata redemption of 95% to all shareholders in the fund.

Assets representing the value of the remaining 5% of shareholdings in the fund are being retained for no longer than six months to cover future liabilities under the terms of sale agreement or as a reserve for contingent fund liabilities.

Liberty Living, which is part of the Brandeaux Student Accommodation Fund, comprises 41 properties and more than 16,700 rooms, and was completed following a competitive sale process led by investment banks Morgan Stanley and Oriel Securities.

As part of the sale of the portfolio, CPPIB, which manages over C$238 billion in investment assets for the Canada Pension Plan on behalf of eighteen million Canadians, assumed the fund’s existing debt obligations, made up of approximately £200m of bank loans and US$155m of privately placed US loan notes.

At the time of sale, the fund had an unaudited net asset value (NAV) of £797.1m, equating to a NAV of £2.80 per fund share.


Following the sale of all its property assets, Brandeaux said it intends to wind up the rest of its student funds.

“Further compulsory pro rata redemptions will be made in due course as cash becomes available during the voluntary liquidation process,” it added.

Discussing the sale, John Kennedy, chief executive at Coral Portfolio, another student accommodation provider, said: “The size of this deal is a massive endorsement of the health of the student accommodation sector.  There is huge international appetite for this asset class with recent sales attracting investors from the US, Australia and China.

“This first institutional entry from Canada comes hot on the heels of Russian LetterOne’s purchase of the Carlyle Group’s portfolio last month for £535m.

“With 2014 seeing inward investment of over £2bn, 2015 will see this figure top £3bn in the UK alone.  Student numbers are continuing to grow with another 100 million new students expected globally in the next 10 years.

“This sector, with its simple supply demand story, has matured into an institutional investment ‘no brainer’; there has never been a better time to be exposed to it.”

Adverse conditions

Brandeaux cancelled its plans to float Liberty Living as a separate fund in a £400m launch last July. It cited “adverse public market conditions” as the reason for the cancellation.

The news of redemption will come as a relief to investors, who have been trapped in the fund since July 2013, when the company took the decision to suspend its entire range citing “liquidity issues”.

Last week, Coral Portfolio said it was keen to acquire the assets of Mansion Group’s Student Accommodation Fund following the completion of a strategic review by property consultancy Knight Frank.

Mansion’s fund closed to redemptions in October 2013 in the wake of Brandeaux closure.


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