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Property investor Primewest Group (ASX: PWG) is raising $55 million to expand a newly formed income fund and to boost its investment in agricultural assets.
The group, which now has funds under management totalling $4.9 billion, has launched a fully underwritten institutional placement of 43 million new securities priced at $1.27 each. That's a 5.9 per cent discount to their previous closing price of $1.35.
The funds will be used by Primewest as a cornerstone investment in the Primewest Property Income Fund, a newly formed open-ended investment trust with $30 million in assets under contract.
The WA-headquartered company is also lifting its investment target for the Primewest Agricultural Trust No.1 from $100 million to $350 million, citing the many opportunities it has identified in the market.
Primewest is investing a combined $40 million in both of these funds.
"We have been exploring the launch of an open-ended investment fund for some time," says Primewest managing director David Schwartz.
"The launch of Primewest Property Income Fund will provide our investors with the benefits of the Primewest investment process whilst having access to liquidity over time.
"Since launching the Primewest Agricultural Fund in April 2020, we have sought to expand this fund through high quality acquisitions. We are now in active discussions with a number of vendors in a wider range of agricultural classes including almonds, tomatoes and vineyards."
The capital raising consolidates a highly active year for Primewest which has increased funds under management by 8.9 per cent to $4.9 billion since June. The group has secured $376 million in assets since then with $134 million under contract.
Primewest has announced an annual distribution guidance of 5c per security for FY21 after announcing unaudited 1H21 operating earnings per share of 2.1 cents per security.
"Primewest has continued to deliver on its strategy over 1H21, with consistent growth in assets under management following a period of high transaction activity," says Primewest chairman John Bond.
"In particular, we achieved a number of milestones during the past six months including the expansion of our institutional daily needs mandate to over $930 million and launch of Primewest Bespoke which currently manages $170 million in assets."
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