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Northern Horizon exits its second care home fund in €141 million deal

In a transaction signed and closed on Thursday 8 February 2018, Northern Horizon has sold its Healthcare II fund to a fund managed by Evli. The transaction values the fund’s 30-asset Finnish portfolio at €140.8 million. The exit of Healthcare II, a fund launched in December 2013, delivers a net IRR of approximately 29% and an equity multiple of 1.7x to its investors.

Jussi Rouhento, Fund Manager of the Healthcare II fund and Northern Horizon’s Head of Finland, commented on the deal: “The exit completes the story of one of the highest quality healthcare real estate portfolios in Finland. The portfolio consists of new assets 100% let on leases with an average remaining term exceeding 12 years. By exiting now, we were able to achieve a 50% capital gain on the equity invested. This is why we feel that it was in the investors’ best interest to exit now.”

Andreas Michelsson, Co-Fund Manager of Healthcare II, adds: “In terms of net IRR, the fund has surpassed its original goal by a factor of three while delivering the targeted equity multiple in less than half the expected time. From our point of view, the portfolio is currently at its peak and there was no more work for us to be done to further enhance the value.”

Michael Schönach, Group CEO of Northern Horizon and Chairman of Healthcare II, says: “This is our second care home fund exit and it once more demonstrates our team’s ability to deliver exceptional risk-adjusted returns. The portfolio attracted strong interest from a diverse domestic and international buyer universe, highlighting the demand for the predictable and uncorrelated cash flows from this demographically driven real estate asset class. We remain committed to our on-the-ground care home portfolio assembly strategy through our third specialised fund, the Nordic Aged Care Fund, which invests in our entire Nordic home market.”

JLL and Krogerus advised Northern Horizon on the structured sales process.

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