SWF investors help European property tech fund hit first close

SWFs and pension funds are traditionally big investors in real estate

  
A person wearing a protective face mask is seen in London, following the outbreak of the coronavirus disease (COVID-19), London, Britain, May 23, 2020. Image for illustrative purposes.

A person wearing a protective face mask is seen in London, following the outbreak of the coronavirus disease (COVID-19), London, Britain, May 23, 2020. Image for illustrative purposes.

REUTERS/Steven Watt

LONDON: Sovereign wealth funds and pension funds are among investors in a 200 million euro ($237 million) property technology, or "proptech", fund focused mainly on European accommodation which announced its first close on Tuesday.

The fund, led by London-based Round Hill Ventures, will invest in late seed proptech ventures across real estate sectors. Round Hill Ventures, backed by real estate asset manager Round Hill Capital, aims to make around 45 investments across Europe, including in the Nordics and Israel, Michael Bickford, founder and chief executive of Round Hill Capital, said.

Proptech, which has become an area of increasing focus for venture capital, uses technology to improve real estate management. This can include, for example, harnessing data from leasing contracts, capital projects, public records or a building's infrastructure.

"We are on the cusp of major changes in global real estate as the sector evolves to match modern consumer expectations and streamline its operations," he told Reuters.

Sovereign wealth funds (SWFs) and pension funds are traditionally big investors in real estate, which faces uncertainty in areas like office and retail due to coronavirus social restriction measures.

But the COVID-19 pandemic has also hastened interest in using technological innovation.

"It has accelerated the raise of our fund, it has accelerated interest in our fund. It has accelerated our ability to invest in companies," Bickford said.

Round Hill Ventures hopes to raise further funding from SWFs, pension funds and family offices ahead of its targeted second close during the first quarter of 2021, by which stage it will be close to its 200 million euro target.

The fund will begin investing in the next 90 days or so to take advantage of a "softening" in valuations, Bickford said.

"This is an incredibly unique time period to be able to invest in these proptech companies at attractive valuations." ($1 = 0.8455 euros)

(Reporting by Tom Arnold; Editing by Alexander Smith) ((Tom.Arnold@thomsonreuters.com; +442075428510; Reuters Messaging: tom.arnold.thomsonreuters.com@reuters.net))

More From Funds