Property fund manager FKP Funds Management (FKP) has raised $136 million from 17 institutional investors and closed its Core Plus Fund.
The fund, which opened in December 2005, was oversubscribed by $65 million and was forced to scale back contributions.
"We had to scale back the fund to $135 million and this also meant that FKP's holding in the portfolio was reduced from 20 per cent to 14 per cent," FKP executive general manager Adam Learmonth said.
Institutional investors in the fund include industry funds Westscheme and Statewide Superannuation Trust. Other investors include Challenger and the master fund Synergy.
Learmonth said the aim of the Core Plus Fund was to buy property from private investors. The value from the core plus element of the fund comes from buying 'dog properties' and transforming them.
One of its core assets in the fund included an art deco building in Brisbane. Refurbished and leased for two years to the Brisbane City Council, the property has produced a 20 per cent total return for the six months to December 2006.
Overall the fund has generated a return of 18.1 per cent during the same period.
"We were very pleased with the investor response to the fund. We aim to bring an institutional flair to the private investor market," Learmonth said.
