Nomura quits as adviser to Saunders fund

The 'frustrated' Japanese bank withdraws from the process to list Index-Linked Properties in London
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The Independent Online

Nomura, the investment bank, has quit as adviser to Index-Linked Properties (ILP), the high profile fund launched by Robin Saunders, a former WestLB rainmaker.

It's believed that Nomura, which was a co-adviser with Fairfax, the City investment bank, has become frustrated with the project amid apathy from hedge funds and institutional investors. Fairfax will continue marketing the fund, which is believed to be looking to raise a target of £1bn of investment firepower.

Sources close to ILP sought last week to play down Nomura's role in the company's creation, insisting the listing, which could happen as early as next month, was unlikely to be derailed by the Japanese bank's decision. The source said that the flotation was still likely to be the biggest on London's stock market this year, eclipsing that of Max Property, the property fund run by Nick Leslau, which raised £232m on its debut in May.

Like Max Property, ILP will seek to list on the junior Alternative Investment Market (AIM).

The firm, which will be co-managed by Ms Saunders's private equity group, Clearbrook Capital, and DTZ Investment Management, is believed to have secured the services of Alan Clifton, the former managing director of Morley Fund Management, the asset management arm of Aviva, as chairman of the group.

The group has already struck a deal with Tesco to buy £400m worth of property from the supermarket chain, leasing the assets back to the retailer.

The fund is aiming to provide a 5.5 per cent yield for its investors, primarily investing in retail and industrial properties. At least 90 per cent of all investments in the fund will be in safe, index-linked or fixed increase leases. The firm says it will not be using leverage techniques.

According to marketing literature used to sell the fund the launch date for ILP had been mid-October but the listing has been forced back.

"It's common knowledge in the property world that ILP has found raising the money difficult," said one City property source. "I know a lot of the people I have spoken to have balked at the fees associated with it. For what it does, it's pretty expensive." ILP says it will charge management fees of 1 per cent of net assets, while it could also scoop performance fees subject to a high watermark.

The fund is likely to face particular scrutiny given the role of Ms Saunders (left). She quit WestLB in 2003 following criticism of a number of high profile deals, including a £750m capital-raising for TV rental company Boxclever.

She announced her return to the City in 2008 with an interview in Vogue magazine. During the interview, she said of her time in the wilderness: "People you thought were your friends scatter to the winds. I remember going to a cocktail party during that time and as I walked into the room you could hear a pin drop: everyone looked at me as if I were a ghost."

Clearbrook Capital, the private equity firm she founded after leaving WestLB, is believed to have raised as much as £2bn from investors.

Beside Ms Saunders, Stefan Allesch-Taylor, the broker famed for his spat with former chancellor Ken Clarke, will play a key role in the fund, having stepped down as chief executive of Fairfax.

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