Leicestershire County Council Pension Fund and Nottinghamshire County Council Pension Fund has awarded Kames Capital £55m towards its new closed-ended property fund.

The two schemes join the West Midlands Pension Fund which provided a £50m seed investment at the launch of the seven year Active Value Property Fund II in July. All three funds will soon become an established LGPS Central investment pool.

The new fund, which has a seven year life cycle with the possibility to extend for a further two, is a successor to the Kames UK Active Value Property Unit Trust, which raised £275m from institutional investors by 31 December 2014.

The current fund is a Jersey Property Unit Trust.

Commenting on the new fund, Leicestershire County Council Pension Fund, investments manager Colin Pratt said: “UK secondary property offers an attractive and stable yield, and following the EU referendum vote we believe that the uncertainty will throw up opportunities within the property market. As existing investors with Kames Capital we understand the active value approach and the depth and quality of the team behind the new fund.”

Nottinghamshire County Council Pension Fund senior accountant (for pensions, investments and treasury management) Simon Cunnington added: “The result of the EU Referendum is leading to high levels of volatility in the UK commercial property market. This offers opportunities for active investors to acquire good-quality secondary assets at attractive prices. We have a longstanding relationship with Kames Capital and are delighted to support the new fund.”

Kames Capital head of institutional sales for property Shaun McWilliam said: “Our active value strategy focuses on good-quality income, enhanced through active management and offering the prospect of positive rental growth. We are delighted that three local government pension schemes have decided to support the new fund with a combined £105 million, demonstrating confidence in our property investment team and the positive investment case for secondary property.”

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