Falco originates and manages both single and multi-asset funds.
Falco’s multi-asset funds are either managed in-house or via partnerships with specialist operators. 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
Real estate debt funds managed by Falco Capital have lent
c.£60m since 2016. The funds specialise in mezzanine development and specialist bridge lending with a particular focus on residential and PBSA development in both the UK and Europe. The funds have lent behind RBS, OakNorth, Octopus and other established senior development lenders and target deal sizes are between £0.5m and £5m of net loan advance (mezzanine). The funds are active regionally and have concluded deals across the UK from Bristol to Scotland.
The primary debt fund is FREFF, which is Luxembourg resident and regulated by the CSSF.
Amro Falco Fund – Purpose Built Student Accommodation (“PBSA”) in Iberia
Falco Capital has entered into a joint venture with Amro Partners, a specialist PBSA operator with a track record of 1,500+ beds of student and multi-family housing completed and under development in the UK market. The investment strategy of the Amro Falco Fund is to develop and operate a c.4,000-bed PBSA platform in Iberia over a 4-6 year hold period and to exit the stabilised assets to the institutional market. The Fund is structured as an unregulated Luxembourg close-ended limited partnership (“SCSp”). As of June 2019, the Fund has acquired 924 beds under construction and in planning in three Spanish cities (in Phase 1) and is now in discussion with the institutional market to scale to €100m of equity for Phase 2.
BUILD TO RENT FUND
Falco Capital will be launching a build to rent fund in the second half of 2019 via a joint venture with an East Midlands’ based housebuilder and a residential lettings and management specialist. The Fund’s aim is to develop and operate a portfolio of up to £500m of private stock (predominantly family housing) over a five to seven year period and exit via institutional sale or conversion to a REIT. The Fund will be seeded with a 138 unit scheme under construction in Northampton which will be transferred by the housebuilder with a matching cash investment from Falco investors to acquire a pipeline of further sites identified.
In addition to Funds, Falco undertakes single asset real estate equity and debt projects in-house or with development partners, some examples of which are below:
HINCKLEY 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 new private members golf course which opened in Hertfordshire in 2013 and which hosted the prestigious new 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.
At Falco Capital, we have put together a team of experienced and passionate employees, who each add their own individual talents to the company.