Under-the-radar UK manager raises £565m for debut fund

Capital will be deployed across sectors where there are dislocation opportunities.

  • What? Melburg Capital has raised a debut £565m fund.
  • Why? Investment manager to target mispriced assets amid market
  • What next? Industrial, living, strategic land and operational real estate
    will be main areas of focus for deployment.

Melburg Capital, an investment and asset management business founded by a notoriously discreet senior executive, has raised £565m for its debut UK real estate fund, React News can reveal.

Melburg Real Estate Fund I (MREF I), which will invest both directly and in joint venture opportunities, has been backed by several of the investment manager’s existing institutional partners along with private family offices.

The firm’s website notes it has previously worked with Angelo Gordon, AEW, Revcap, Investec, Hines and Leumi, and has transacted £1bn of deals since it was set up nine years ago. However, it declined to comment on which investors had participated in the inaugural fund raise.

Although sector-agnostic, MREF I will have a particular focus on industrial, living, strategic land and operational real estate opportunities throughout the UK.

Our superior market connectivity coupled with a data-driven approach is enabling us to aggregate fundamentally mispriced assets across all sectors and regions

Melburg was founded in 2015 by Jack Burgess, a notoriously private Schroder alumni who has shunned the media spotlight and has yet to be interviewed.Although still in his thirties, several sources told React News Burgess had garnered a reputation for shrewd deal-making and discretion. As chief executive officer, he has overall responsibility for the group’s transactional activity and investment strategies.

Over the past three years Melburg has diversified its platform, securing several high-profile planning consents and acquisitions. Most recently these include a 400-bed student accommodation consent in Bristol city centre, along with the 850-bed mixed-use approval within its Redcatch Quarter, which forms the hub for the development of the former Broadwalk Shopping Centre in Knowle.

On the industrial side, Melburg has acquired in excess of 2m sq ft since its inception. Last summer, the manager prelet its entire Voltaic estate to XPO Logistics, in a move that marks the largest letting of the year in Yorkshire. Voltaic is a 210,000 sq ft logistics hub at the Wakefield 41 Industrial Estate,
West Yorkshire. XPO agreed to a 10-year lease term after Melburg repositioned the asset.

Helen Blair, Melburg’s chief financial officer, said: “The commitments are a reflection of the hard work and performance of the wider team. We intend on organically deploying our capital by utilising the extensive reach of both our direct property and venture capital arms.

“Although scale and consolidation remain a primary driver for most of the institutional market, our superior market connectivity coupled with a data-driven approach is enabling us to aggregate fundamentally mispriced assets across all sectors and regions.”

Successful raise
The success of Melburg Real Estate Fund I is impressive when benchmarked against a challenging backdrop for real estate fundraising. Only 59 private real estate funds closed in the first three months of 2024 – the lowest quarter on record, according to Preqin data analysed by React News. The total aggregate capital also remained low, at $28.6bn. 2023 was the toughest year in a decade for capital raising, with only $151.9bn of aggregate capital raised across 483 funds amid persistent macroeconomic headwinds.

View React News article here.