Falco’s multi-asset opportunities are either managed in-house or via partnerships with specialist operators. Investments are either structured as a diversified fund or as a single asset investment.
Typically, a fund will have two phases: (1) a seed funding round from Falco investors to establish track record and proof of concept and (2) an institutional funding round to achieve scale.
Falco Real Estate Finance Fund
In 2016, the Falco Group established a real estate lending business which has, as at January 2021, completed £85m of net loan advances across 32 transactions. FREFF is the primary lending vehicle. This is an open-ended investor fund, domiciled in Luxembourg within a SICAV-SIF, and supervised by the Luxembourg regulatory authority, the CSSF.
Amro Falco Purpose Built Student Accommodation (“PBSA”) Fund - Iberia
In 2017, Falco entered into a joint venture with Amro Partners to develop and operate a c.4,000-bed PBSA platform in Iberia over a 4-6 year period. As of January 2021, the fund was in the construction phase of three properties in Malaga, Valencia and Seville totaling 747 student beds, having completed and sold its first project in Granada (354 beds) to an institutional purchaser in the summer of 2020, returning a 35% IRR.
Further opportunities will be forthcoming in Spain over the course of the coming months as single investment opportunities rather than within a fund.
Launched in February 2020, Watermeadow Homes is a build to rent business operating under a joint venture agreement between Falco investors and Barry Howard Group, an East Midlands’ based housebuilder. The company’s objective is to develop and operate a portfolio of up to £500m of private rental stock (predominantly family housing) over a five to seven year period and exit via institutional sale or conversion to a REIT. The business has been seeded with a 138 unit scheme currently under construction in Northampton which has fully let its first phase of 50 family houses. The company has since acquired further sites in the Midlands which give it a current development pipeline of 630 units.
Juice Ventures is a venture debt business providing short term financing to tech-enabled businesses. Juice will provide funding to borrowers for the sole purpose of financing digital media advertising for user acquisition. The Juice team will draw on its deep pool of experience to target opportunities in the Subscription, E-Commerce and Gaming sectors through the provision of revolving credit facilities.
Falco investors have invested equity into the management business and retain board representation.
Amicis is a restaurant group with its first restaurant established in 2017 in Central Madrid. Investors have participated as equity investors with Falco retaining board representation.
Falco Amro Pamplona
The Falco Amro Pamplona investment is the fifth project in the Joint Venture, following on from the now closed Amro Falco Fund which concluded its first round of Spanish PBSA investments in 2019. The property is currently a freehold greenfield development site in the south of Pamplona which will see a new building constructed consisting of 307 bedrooms mixed across en-suites, studios and ‘twodios’.
Falco has partnered with Blakesley, a South West based residential developer to deliver a for sale development of 32 houses in Kingsbridge, Devon. The scheme is forecasted to complete and exit in 32 months with a projected return on equity to investors of 2.1x and an IRR of in excess of 31%.
Hinkley Hub, Leicestershire
A single asset partnership which acquired a four acre former hosiery factory site and obtained planning permission for 46 houses and Hinckley Hub, a 4,645 sq m office building housing the main council offices for Hinckley and Bosworth Borough council, the Hinckley offices of Leicester County Council and the relocated Hinckley Job Centre Plus, the first such co-location by Job Centre Plus in the UK. The Hub achieved a BREEAM Excellent rating and was sold upon completion to Aviva Investors. The project generated a 24% IRR to investors over the project’s five year life.
Great Marlborough Street, Soho
A single asset SPV which acquired the freehold interest in 40 & 41 Great Marlborough Street, London, W1 in June 2015. The building comprises two, of an original terrace of four, Victorian houses situated close to Carnaby, Oxford and Regent Streets, in a prime Soho location. Planning permission was obtained for the partial demolition and extension of the building and construction was completed in November 2017.
The retail and office elements were let and the building was sold to an international investor in late 2017 for an undisclosed sum generating a 33% IRR for investors.
CENTURION GOLF CLUB
Centurion is a private members golf club which opened in Hertfordshire in 2013 and which hosted the prestigious European PGA Tour GolfSixes event in 2017 and 2018. In 2015, Falco originated private debt funding for the construction of the new clubhouse which opened in July 2016. Open to the public as well as members, the Clubhouse features an 84 cover restaurant and terrace overlooking the 18th green.