Gresham House British Strategic Investment Fund (BSIF)

A Product of Gresham Housing & Infrastructure

Investment approach

The Gresham House British Strategic Investment Fund LP (BSIF) is a closed-ended fund targeting an 8-10% per annum return (net of fees) over a 12-year life. The fund aims to support the UK economy’s need for “patient capital” investment into economically attractive and socially beneficial sectors delivering both financial and non-financial returns for investors. The fund will aim to pay an ongoing income yield of 3-5% per annum, following the end of the fund’s Investment Period (defined below) as the fund’s underlying investments mature.

The fund will provide Limited Partners (LPs) invested in it access to niche and sub-threshold size investment opportunities that would otherwise be difficult for LPs to source, appraise, fund and monitor in a cost-effective way. This access will be enhanced via the fund’s Limited Partner Investment Advisory Committee (the LPIAC). The LPIAC will allow LPs to be engaged with the Investment Manager throughout the investment process. This process will allow LPs to access co-investment opportunities in a more cost-effective fashion, introduce local/regional opportunities and to “steer” capital towards particular projects.

In addition to a robust financial basis for targeting the sectors, we believe that long-term capital deployed in the UK can, and should, have a positive societal or social benefit. The belief that investments should be made on a sustainable and socially equitable basis forms a key part of the fund’s investment philosophy and will drive our ability to generate a “double-bottom line” return for LPs.

The fund will aim to develop a diversified portfolio that is characterised by:

  • Longer term superior returns: BSIF is targeting returns of 8-10% per annum (net of fees) including a 3-5% income yield (as the Fund’s portfolio of assets matures).
  • Visible cash flows: We are aiming to develop a portfolio that will be positively correlated with inflation and provide long-term visibility of future income streams from contractual arrangements.
  • Relative stability: Our investments will predominantly be private, to reduce exposure to short term price volatility from listed securities.
  • Diversification: There are explicit portfolio construction constraints to ensure that the fund has a diversified portfolio.
  • Additional investment flexibility: We will provide relevant deal-by-deal co-investment opportunities to allow our LPs to increase their allocation to underlying transactions or themes of specific interest.
  • “Double bottom-line” returns: We believe that investments in Housing and Infrastructure can deliver non-financial benefits to the UK economy in addition to the investment returns.

The benefits of investing into the BSIF fund

Attractive sector dynamics

  • Structurally important sectors to UK GDP growth
  • Priority for UK central and local government

Downside protection

  • Defensive sector fundamentals
  • Substantial asset-backing
  • Visibility over income

Attractive investment fundamentals

  • Targeting both an income yield and capital growth
  • Exposure to UK inflation

Positive social impact

  • Supporting local and regional investment
  • Targeting under-served investment areas

Experienced investment team

  • Over 120 years of combined experience

Cost-effective direct investment

  • Partnership approach
  • Ongoing engagement with LPs

Transparency

  • Co-investment potential provides increased discretion
  • Open-book policy through internet-based portal

Investment Process

Capital allocation and investment decisions are made by an experienced Investment Committee with over 120 years of experience. Investment opportunities will be sourced through the Gresham House network, LPIAC (Limited Partners Investment Advisory Committee), the Investment Team and the Investment Committee network, third party advisers and via the local community proposals where the LPIAC will play a role in sourcing local impact investment opportunities across infrastructure and housing.

BSIF will have a three stage investment approval process, which will provide frequent engagement with the Investment Committee throughout the year. We believe that ongoing level of engagement allows us to react quickly to new investment opportunities whilst allowing our investors to benefit from the experience of our Investment Committee members and a robust risk management framework.