21 Jul 2010

Vulture fund eyes finance company assets

4:06 pm on 21 July 2010

A global property fund is circling the distressed assets of struggling finance companies in New Zealand for inclusion in a new $250 million vulture fund for wealthy Asian investors.

The Du Val Group is creating a fund that aims to buy properties on the cheap and sell them at a profit once the market improves.

The fund will target office, residential and commercial properties worth between $5 million and $50 million and is promising an annual rate of return of 20%.

It's the first fund that will give international investors exposure to New Zealand's property market, and it is primarily aimed at attracting Chinese and Hong Kong investors.

Investor relations director David Kilburn says Du Val is particularly interested in acquiring property assets on the loan books of several finance companies.

While the majority of investors are expected to be foreign and the Du Val Group is a multinational, Mr Kilburn says the fund will be related to a New Zealand-owned company, so it won't need Overseas Investment Office approval to buy properties.

Advisor William Nobrega from the Conrad Group says New Zealand's property market offers fantastic growth opportunities.

Du Val Group has offices in Auckland, London and Hong Kong.