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Trident brings multi-manaber to pubs

RAM Capital Partners is looking to raise up to £20m to invest in an enterprise investment scheme fund, which comprises a multi-manager portfolio of freehold and long leasehold pubs.

The Trident pub company EIS fund has appointed three established pub managers to find suitable investment opportunities in Central England, Northern England and Central Scotland.

Arizona EIS is part of the Arizona Group, a pub management services company that sources and manages public houses on behalf of national pub companies and private investors. The Arizona Group currently trades 24 pubs across the UK including four in the North West and two in Yorkshire.
Maclay Inns, based in central Scotland, runs its own portfolio of 17 pubs in addition to nine on behalf of EIS companies. It has achieved cash exits at a premium for four EIS pub companies, including the Thistle Pub Company.
Midlands based Urban & Country Leisure trades 16 pubs across the UK. The management team previously ran Mercury Taverns, a pub management company that had over 120 public houses under management before it was sold to Pubmaster in 1998.

The multi-manager approach was taken to spread risks across more than one manager and geographically, as the managers specialize in different regions. A review committee that comprises a panel of industry experts to help with the investment process and governance will support the multi-manager approach.

The fund will look for pubs that are trading at a level below the potential identified by the pub managers. It is intended that the value of pubs bought by the fund will be enhanced through a combination of refurbishment, more focus on food and a well-managed exit for investors. It is expected that opportunities to buy pubs will arise from sales by individuals and companies. There will be gearing of up to 60 per cent to support growth and acquisition, while no more than £2m will be invested in each pub.

The multi-manager approach makes this EIS pub fund stand out from others, but as with all multi-manager funds, charges may be an issue for IFAs and investors. Pubs may be capable of producing good returns, while the asset backing may provide a greater sense of security to investors.

There is no guarantee that suitable opportunities with scope for increasing value will be found, but having three experienced pub managers on board may give this fund a competitive edge.

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