Proposed Subsequent Issue to raise target of £125M
18 January 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EC NO. 596/2014) AS IT FORMS PART OF THE DOMESTIC LAW OF THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (AS AMENDED) (THE "UK MARKET ABUSE REGULATION")
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, NEW ZEALAND, CANADA, SINGAPORE, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY MEMBER STATE OF THE EEA (OTHER THAN ANY MEMBER STATE OF THE EEA WHERE THE COMPANY'S SECURITIES MAY BE LEGALLY MARKETED), OR ANY OTHER JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFUL, OR TO ANY NATIONAL, RESIDENT OR CITIZEN OF THE UNITED STATES, AUSTRALIA, NEW ZEALAND, CANADA, SINGAPORE, JAPAN OR ANY MEMBER STATE OF THE EEA (OTHER THAN ANY MEMBER STATE OF THE EEA WHERE THE COMPANY'S SECURITIES MAY BE LEGALLY MARKETED)
This announcement is an advertisement for the purposes of the Prospectus Regulation Rules of the UK Financial Conduct Authority ("FCA") and does not constitute a prospectus. Investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in a quadripartite prospectus (comprising a summary, a registration document, supplement and a securities note) expected to be published shortly by LXi REIT plc (the "Prospectus") in its final form and not in reliance on this announcement. The Prospectus will, when published, be available, subject to certain access restrictions, on the Company's website (www.lxireit.com/company-documents), at the Company's registered office at 125 London Wall, London , EC2Y 5AS and at the National Storage Mechanism via https://data.fca.org.uk/#/nsm/nationalstoragemechanism. Approval of the Prospectus by the FCA should not be understood as an endorsement of the securities that are the subject of the Prospectus. Potential investors are recommended to read the Prospectus before making an investment decision in order to fully understand the potential risks and rewards associated with a decision to invest in the Company's securities. This announcement does not constitute, and may not be construed as, an offer to sell or an invitation or recommendation to purchase, sell or subscribe for any securities or investments of any description, or a recommendation regarding the issue or the provision of investment advice by any party.
LXi REIT plc
(the "Company" or "LXi REIT")
Proposed Subsequent Placing, Open Offer, Offer for Subscription and Intermediaries Offer
The board of Directors (the "Board") of LXi REIT (ticker: LXI), the specialist inflation-protected long income REIT, today announces a proposed issue of new ordinary shares ("New Ordinary Shares") in the Company to raise target gross proceeds of approximately £125 million by way of a Subsequent Placing, Open Offer, Offer for Subscription and Intermediaries Offer (the "Subsequent Issue") under the Company's share issuance programme (the "Share Issuance Programme"), the details of which will be set out in the Prospectus expected to be published by the Company later this week.
The Subsequent Issue will target the issue of 88,261,608 New Ordinary Shares at an issue price of 142 pence per New Ordinary Share (the "Issue Price"). The Issue Price represents a premium of 2.9 per cent. to the Estimated NAV per Ordinary Share as at 31 December 2021 (unaudited) of 139.5 pence, reduced by the interim dividend of 1.5 pence per Ordinary Share that the Company is targeting in respect of the quarter ended 31 December 2021 (the "2021 Q3 Dividend"), and, a discount of 6.8 per cent. to the closing price per Ordinary Share on 17 January 2022 of 152.4 pence per Ordinary Share (being the last business day prior to this announcement). The 2021 Q3 Dividend is a target only and, for the avoidance of doubt, is not a profit forecast.
Summary
· Target issue of 88,261,608 New Ordinary Shares pursuant to a Subsequent Placing, Open Offer, Offer for Subscription and Intermediaries Offer, targeting gross proceeds of approximately £125 million
· Shareholders who qualify for the Open Offer ("Qualifying Shareholders") will be offered the opportunity to participate in the Open Offer on the basis of 3 New Ordinary Shares for every 25 Existing Ordinary Shares (the "Open Offer Entitlement")
· Qualifying Shareholders will also be offered the opportunity to subscribe for New Ordinary Shares in addition to their Open Offer Entitlement under an excess application facility (the "Excess Application Facility")
· The Board has reserved the right to increase the size of the Subsequent Issue by reallocating New Ordinary Shares otherwise available under the Share Issuance Programme to increase the size of the Subsequent Placing, the Offer for Subscription and/or the Intermediaries Offer. Any decision to increase the size of the Subsequent Issue will only be made after careful consideration of the size and availability of the Company's investment pipeline
· The Issue Price is 142 pence per New Ordinary Share. This represents a premium of 2.9 per cent. to the Estimated NAV per Ordinary Share as at 31 December 2021 (unaudited) of 139.5 pence, reduced by the 2021 Q3 Dividend of 1.5 pence per Ordinary Share
· The Issue Price represents a discount of 6.8 per cent. to the closing price per Ordinary Share on 17 January 2022 of 152.4 pence per Ordinary Share (being the last business day prior to this announcement)
· The Investment Advisor has identified a significant pipeline of additional assets which meet the Company's investment objective and policy, the vast majority of which have been sourced off-market through the Investment Advisor's extensive contacts and relationships
· The pipeline assets, which total approximately £272 million (including expected costs) benefit from a long weighted average unexpired lease term of over 20 years, a blended net initial yield of 5.2 per cent. (net of acquisition costs) and 97 per cent. index-linked or fixed uplifts. These assets are diversified across a range of defensive and structurally supported sub-sectors, by location and are leased to a range of institutional-grade tenants with strong financial covenants, with a good mix within the pipeline of built assets and forward funded structures
· Although there can be no assurance that any of these properties will be purchased by the Company, the Investment Advisor is confident that it will substantially invest or commit the net proceeds resulting from the Subsequent Issue within three months following Subsequent Admission
· The Company has reported continuing robust rent collection, despite the pandemic, and expects to collect 100 per cent. of the rent due for Q1 2022, which would represent 100 per cent. rent collection for the 12 months ending 31 March 2022. As announced on 10 January 2022, the Company is now targeting an annual dividend of 6.3 pence per Ordinary Share for the 12-month period commencing on 1 April 2022*
· Since IPO in 2017 (to 31 December 2021), the Company has delivered an average total shareholder return of 13.1 per cent. per annum
· The results of the Subsequent Issue are expected to be announced in early February 2022 and a full timetable will be published in the Prospectus
Commenting on today's announcement, Stephen Hubbard, Chairman of LXi REIT plc, said:
"This proposed subsequent issue will provide the capital to enable the Company to capitalise in short order on its £272 million near term pipeline of accretive assets. The pipeline will further enhance and diversify the Company's portfolio of properties and is available at an average net initial yield of approximately 5.2 per cent., which is higher than the current portfolio valuation yield of 4.5 per cent. The pipeline assets are diversified across a range of defensive and structurally supported sub-sectors and let to institutional-grade tenants with strong financial covenants on long term leases, 97 per cent. of which are indexed-linked or contain fixed uplifts.
Our portfolio continues to perform strongly, benefiting from the embedded inflation linkage in our rents, and its exposure to attractive sub-sectors of the real estate market including grocery and industrial. Meanwhile our recent acquisitions have further diversified our portfolio, including into areas such as life sciences and education, and clearly demonstrate our ability to create additional value outperformance for shareholders by sourcing attractive off-market properties and forward funding opportunities.
We expect the Group's portfolio to continue to deliver attractive, defensive inflation protected income returns and capital growth to our shareholders going forward."
Background to, and reasons for, the Subsequent Issue
The Company listed on the London Stock Exchange in 2017 with the objective of delivering inflation-protected income, as well as ongoing capital growth, by investing in a diversified portfolio of UK property that benefits from long term index-linked leases with institutional-grade tenants. Since IPO in 2017 (to 31 December 2021), the Company has delivered an average total shareholder return of 13.1 per cent. per annum.
In connection with the Subsequent Issue, the Investment Advisor, on behalf of the Company, has identified a significant pipeline of additional assets which meet the Company's investment objective and policy, the vast majority of which have been sourced off-market through the Investment Advisor's extensive contacts and relationships.
The Investment Advisor has already commenced negotiations and discussions concerning the acquisition of such assets on behalf of the Company. Furthermore, the Investment Advisor, on behalf of the Company, has entered into exclusivity agreements in relation to the acquisition of a number of these assets.
These assets are diversified by location and leased to a range of institutional-grade tenants with strong financial covenants, with rental uplifts linked to inflation or a fixed growth rate and with a good mix within the pipeline of built assets and forward funded structures.
The assets, which total approximately £272 million including expected costs, are diversified across a range of defensive and structurally supported sub-sectors, including Grocery, Convenience, Industrial, and Drive-thru coffee. They benefit from a long weighted average unexpired lease term of over 20 years and a blended net initial yield of 5.2 per cent. (net of acquisition costs). The Company's current portfolio net valuation yield is 4.5 per cent. as at 31 December 2021.
These acquisitions are subject to ongoing due diligence by the Investment Advisor and the Company's other professional advisers. The Company currently has no binding contractual obligations with potential vendors and, although there can be no assurance that any of these properties will be purchased by the Company, the Investment Advisor is confident that it will substantially invest or commit the Net Proceeds of the Subsequent Issue within three months following Subsequent Admission. The Company has a strong track record of swift and prudent capital deployment.
Benefits of the Subsequent Issue
The Subsequent Issue is being made in order to raise funds for the purpose of investment in accordance with the investment policy and objective of the Company and with a view to delivering further value for Shareholders. The Board believes that it continues to be in the interests of the Company and its Shareholders to grow the Company further by the issuance of new shares.
The Board believes that the Subsequent Issue will have the following benefits for the Company:
· the additional assets forming the pipeline identified by the Investment Advisor, if acquired, are expected to further diversify the Company's portfolio of properties in terms of tenant, geographic and sector exposures at a net initial yield higher than the current portfolio valuation yield;
· the Subsequent Issue is expected to broaden the Company's investor base and enhance the size and liquidity of the Company's share capital; and
· growing the Company through the Subsequent Issue will spread the fixed operating costs over a larger capital base, thereby reducing the Company's ongoing charges ratio.
Overview of the Subsequent Issue
The Subsequent Issue
The Company is targeting an issue of approximately £125 million (gross) through the issue of 88,261,608 New Ordinary Shares pursuant to the Subsequent Issue at the Issue Price of 142 pence per New Ordinary Share.
If overall demand exceeds this target, the Directors have reserved the right, following consultation with the Joint Bookrunners, to increase the size of the Subsequent Issue to a maximum of 224,410,424 New Ordinary Shares (being the total number of Ordinary Shares remaining available for issue under the Share Issuance Programme) by increasing the size of the Subsequent Placing, the Offer for Subscription and/or the Intermediaries Offer. Any decision to increase the size of the Subsequent Issue will only be made after careful consideration of the size and availability of the Company's investment pipeline.
The actual number of New Ordinary Shares to be issued pursuant to the Subsequent Issue, and therefore the gross proceeds of the Subsequent Issue, is not known as at the date of release of this announcement but will be notified by the Company via an RIS prior to Subsequent Admission. The Subsequent Issue is not being underwritten. The maximum size of the Subsequent Issue should not be taken as an indication of the number New Ordinary Shares to be issued.
The New Ordinary Shares to be issued pursuant to the Subsequent Issue will, following Subsequent Admission, rank pari passu in all respects with the Existing Ordinary Shares and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Ordinary Shares by reference to a record date after Subsequent Admission. For the avoidance of doubt, the dividend for the quarter ending 31 December 2021 (if declared) will have a record date prior to the issue of the New Ordinary Shares pursuant to the Subsequent Issue and, accordingly, holders of New Ordinary Shares issued pursuant to the Subsequent Issue will not be entitled to receive this (if declared) in respect of those shares. The Existing Ordinary Shares are already admitted to trading on the London Stock Exchange's main market and to the premium segment of the Official List.
The Issue Price is calculated by reference to the Estimated NAV per Ordinary Share (unaudited) as at 31 December 2021 of approximately 139.5 pence, reduced by the target 2021 Q3 dividend of 1.5 pence per share and increased to reflect the costs and expenses of the Subsequent Issue, which are expected to be approximately 2 per cent. of the gross proceeds of the Subsequent Issue. The 2021 Q3 Dividend is a target only and, for the avoidance of doubt, is not a profit forecast.
The Subsequent Placing
Peel Hunt, Jefferies and Alvarium Securities have each agreed to use their reasonable endeavours to procure subscribers pursuant to the Subsequent Placing for the New Ordinary Shares on the terms and subject to the conditions set out in the Share Issuance Agreement. Details of the Share Issuance Agreement are set out in the Prospectus.
Open Offer
New Ordinary Shares are being offered to Qualifying Shareholders by way of the Open Offer. The Open Offer will provide an opportunity for Qualifying Shareholders to participate in the subsequent Issue by subscribing for their Open Offer Entitlements, being 3 New Ordinary Shares for every 25 Existing Ordinary Shares held and registered in their name at the Record Date (being the close of business on 17 January 2022). New Ordinary Shares issued to Qualifying Shareholders under the Open Offer are not subject to scaling back to satisfy valid applications under the Subsequent Placing, the Offer for Subscription, the Intermediaries Offer or the Excess Application Facility.
If the Subsequent Issue proceeds, valid applications under the Open Offer will be satisfied in full up to applicants' Open Offer Entitlements. Any New Ordinary Shares not taken up pursuant to the Open Offer will be made available under the Excess Application Facility, the Subsequent Placing, the Offer for Subscription and the Intermediaries Offer. Open Offer Entitlements will be rounded down to the nearest whole number and any fractional entitlements to New Ordinary Shares will be disregarded in calculating Open Offer Entitlements. Fractions will be aggregated and made available to Qualifying Shareholders under the Excess Application Facility. Qualifying Shareholders may apply to acquire less than their Open Offer Entitlement should they so wish. In addition, Qualifying Shareholders may apply to acquire additional New Ordinary Shares using the Excess Application Facility.
The full details of the timetable relating to the Open Offer will be contained within the Prospectus, together with details of how Shareholders can apply for New Ordinary Shares under the Open Offer. Shareholders should not subscribe for or purchase any New Ordinary Shares except on the basis of information set out in the Prospectus.
Offer for Subscription
The Directors are also proposing to offer New Ordinary Shares under the Offer for Subscription, subject to the terms and conditions to be set out in the Prospectus. The Offer for Subscription will be made available in the United Kingdom, Guernsey, Jersey and the Isle of Man. Individual applications must be for a minimum subscription of 1,000 New Ordinary Shares and then in multiples of 1,000 New Ordinary Shares thereafter, although the Board may accept applications below the minimum amounts stated above in its absolute discretion.
Intermediaries Offer
Prospective investors may also subscribe for New Ordinary Shares at the Issue Price of 142 pence per New Ordinary Share pursuant to the Intermediaries Offer. Only the Intermediaries' retail investor clients in the United Kingdom, Guernsey, Jersey and the Isle of Man are eligible to participate in the Intermediaries Offer. Investors may apply to any one of the Intermediaries to be accepted as their client.
No New Ordinary Shares allocated under the Intermediaries Offer will be registered in the name of any person whose registered address is outside the United Kingdom, the Channel Islands or the Isle of Man. A minimum application of 1,000 New Ordinary Shares per Underlying Applicant will apply and thereafter an Underlying Applicant may apply for any higher amount. Allocations to Intermediaries will be determined solely by the Company (following consultation with the Joint Bookrunners).
The Share Issuance Programme
The Subsequent Issue is being carried out under the Share Issuance Programme, which was implemented in March 2021 to enable the Company to raise additional capital in the period from 16 March 2021 to 17 February 2022.
At the general meeting of the Company held on 10 March 2021, the Directors were authorised to issue up to 400 million New Ordinary Shares pursuant to the Initial Issue and the Share Issuance Programme without having to first offer those New Ordinary Shares to existing Shareholders. Following completion of the Initial Issue in March 2021 and completion of the Second Issue in July 2021, a total of 175,589,576 New Ordinary Shares have been issued pursuant to this authority, leaving 224,410,424 New Ordinary Shares available for issue under the Share Issuance Programme.
Scaling back and allocation
The Directors have reserved the right, following consultation with the Joint Bookrunners, to increase the size of the Subsequent Issue to a maximum of 224,410,424 New Ordinary Shares (being the total number of Ordinary Shares remaining available for issue under the Share Issuance Programme) if overall demand exceeds 88,261,608 New Ordinary Shares by increasing the size of the Subsequent Placing, the Offer for Subscription and/or the Intermediaries Offer.
In the event that commitments under the Subsequent Issue exceed the maximum number of New Ordinary Shares available (notwithstanding any such increase), applications under the Subsequent Issue (other than applications up to Qualifying Shareholders' full entitlement under the Open Offer) will be scaled back at the Company's discretion after consultation with the Joint Bookrunners. The basis of allocation of New Ordinary Shares under the Subsequent Issue will be:
(i) to each Qualifying Shareholder who applies, up to his full entitlement under the Open Offer (New Ordinary Shares issued to Qualifying Shareholders under the Open Offer are not subject to scaling back to satisfy valid applications under the Subsequent Placing, the Offer for Subscription, the Intermediaries Offer or the Excess Application Facility); and
(ii) any New Ordinary Shares not taken up under the Open Offer or otherwise available under the Subsequent Issue, to applicants under the Subsequent Placing, the Offer for Subscription, the Intermediaries Offer and the Excess Application Facility, with applications scaled back at the discretion of the Company following consultation with the Joint Bookrunners.
There will be no priority given to applications under the Subsequent Placing, the Offer for Subscription, the Intermediaries Offer or the Excess Application Facility pursuant to the Subsequent Issue.
Company Overview
· The Company's current portfolio:
o has a long weighted average unexpired lease term to first break of 22 years, with 96 per cent. of its rental income being index-linked or containing fixed uplifts;
o was acquired at an attractive average net initial yield of 5.6 per cent., which is 110 basis points above its current portfolio valuation yield of 4.5 per cent. (as at 31 December 2021), through a mix of pre-let forward fundings and built asset acquisitions;
o is 100 per cent. let or pre-let to over 70 institutional-grade tenants across a range of robust sectors; and
o is leveraged at a pro-forma Loan to Value ratio ("LTV") of 25 per cent. with a weighted average term of 9 years unexpired and a 2.4% interest cost
· The Company has delivered an average annual total NAV return of 11.1 per cent. per annum since IPO
· The Company is on track to deliver its 6.0 pence per share dividend target for the current financial year and is targeting 6.3 pence per Ordinary Share for the 12 months commencing 1 April 2022*
· The Company has actively sought to recycle its capital where appropriate, with over 50 separate assets sold since IPO, generating an average geared IRR of 24 per cent. per annum to date
· The Company expects to collect 100 per cent. of the rent due for Q1 2022, which would represent 100 per cent. rent collection for the 12 months ending 31 March 2022
Expected timetable
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2022 |
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Prospectus published and Subsequent Issue opens |
Mid-January |
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Subsequent Issue closes |
Early-February |
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Announcement of the results of the Subsequent Issue |
Early-February |
The above times and/or dates may be subject to change and, in the event of such change, the revised times and/or dates will be notified to Shareholders by an announcement through a Regulatory Information Service.
All references to times in this announcement are to London times.
Applications will be made to the Financial Conduct Authority and the London Stock Exchange for all of the New Ordinary Shares to be issued pursuant to the Subsequent Issue to be admitted to the premium listing segment of the Official List and to trading on the premium segment of the Main Market ("Admission"). It is expected that Admission in respect of the Subsequent Issue ("Subsequent Admission") will become effective and dealings in the New Ordinary Shares will commence in February 2022.
Terms not otherwise defined in this announcement have the meanings that will be given to them in the Prospectus. This summary should be read in conjunction with the full text of this announcement and the Prospectus, when available.
FOR FURTHER INFORMATION, PLEASE CONTACT:
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LXI REIT Advisors Limited John White Simon Lee Freddie Brooks |
Via Maitland/AMO |
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Peel Hunt LLP (Sponsor, Joint Global Co-ordinator, Joint Broker, Joint Bookrunner and Intermediaries Offer Adviser) Luke Simpson, Liz Yong, Huw Jeremy, Angus Campbell (IBD) Alex Howe, Chris Bunstead (Sales) Al Rae, Sohail Akbar (Syndicate) |
020 7418 8900 |
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J efferies International Limited and Jefferies GmbH (Joint Global Co-ordinator, Joint Broker and Joint Bookrunner) Tom Yeadon Ed Matthews Rishi Bhuchar
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020 7029 8000 |
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Alvarium Securities Limited (Joint Global Co-ordinator and Joint Bookrunner) Mark Thompson - mark@alvariumsecurities.com Eddie Nissen - eddie@alvariumsecurities.com Oliver Kenyon - oliver@alvariumsecurities.com Ben Nott - ben@alvariumsecurities.com James Pond - james@alvariumsecurities.com
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020 7016 6711 020 7016 6713 020 7016 6704 020 7016 6710 020 7016 6723
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Maitland/AMO (Communications Adviser) James Benjamin |
07747 113 930 lxireit-maitland@maitland.co.uk |
The Company's LEI is: 2138008YZGXOKAXQVI45
NOTES:
LXI REIT plc invests in UK commercial property assets let, or pre-let, on very long (typically 20 to 30 years to expiry or first break), inflation-linked leases to a wide range of strong tenant covenants across a diverse range of robust property sectors.
The Company may invest in fixed-price forward funded developments, provided they are pre-let to an acceptable tenant and full planning permission is in place. The Company will not undertake any direct development activity nor assume direct development risk.
The Company is targeting an annual dividend of 6.3 pence per Ordinary Share for the 12 months commencing 1 April 2022*.
The Company, a real estate investment trust ("REIT") incorporated in England and Wales, is listed on the premium listing segment of the Official List of the Financial Conduct Authority and was admitted to trading on the main market for listed securities of the London Stock Exchange in February 2017.
The Company is a constituent of the FTSE 250, FTSE EPRA/NAREIT and MSCI indices.
* These are guidance levels or targets only and not a profit forecast. In setting this target the Board has applied sensitivities to contracted rental income that reflect the possible impact of the COVID-19 pandemic and assessed the effect of such sensitivities on the net earnings and liquidity of the Group. The target assumes that future rent collection is not materially lower than that achieved so far throughout the pandemic and the Board reserves the right to withdraw or amend guidance in the event that rent collection materially worsens.
There can be no assurance that this target will be met and it should not be taken as an indication of the Group's expected future results which may be impacted by events or circumstances existing or arising after the date of this announcement.
About the AIFM and LXI REIT Advisors Limited
The Company has appointed Alvarium Fund Managers (UK) Limited as its alternative investment fund manager (the "AIFM"). The Company and the AIFM have appointed the Investment Advisor to provide certain services in relation to the Company and its portfolio.
Alvarium Fund Managers (UK) Limited is 100 per cent. owned by Alvarium Investments Limited. Alvarium was established in 2009 and has grown to become a substantial, international multi-family office and asset manager, supervising in excess of US$22 billion of assets, for families, private individuals and institutions. It has over 200 employees and 12 offices around the world.
In September 2021, Alvarium Investments Limited announced it had signed a merger agreement with two US investment houses, Tiedemann Advisors and TIG Advisors, to create a global investment management group with approximately $60 billion of AUM and which, subject to regulatory approval, is expected to complete and list on NASDAQ later this year.
The Investment Advisor has extensive expertise in the purchase and forward funding of commercial property assets let or pre-let on long, index-linked leases to institutional grade tenants with strong financial covenants across a wide range of defensive and robust sectors.
The Investment Advisor comprises property, legal and finance professionals with significant experience in the real estate sector, as described below. The team has capitalised and transacted over £2 billion of commercial property assets with a particular focus on accessing secure, long-let and index-linked UK commercial real estate through forward funding and built asset structures.
The core management team of the Investment Advisor (whose details are set out below) is supported by a team of other accounting, asset management, compliance, marketing, public relations, administrative and support staff. The key individuals responsible for executing the Company's investment strategy at the Investment Advisor are:
John White
John entered the commercial real estate market in 1987 and after qualifying as a chartered surveyor at Allsops moved to the investment team at Cushman & Wakefield. There he became a partner and spent the next 18 years advising a range of institutional investor clients on their UK acquisitions and disposals across the full range of real estate sub-sectors including retail (in and out of town), offices (London, Thames Valley and regional cities), logistics, and alternatives. John moved into private equity real estate in 2007 and co-founded LXI REIT Advisors in 2017.
Simon Lee
Simon trained and practised as a solicitor at City law firm, Slaughter and May, from 1999 to 2006, following which he spent the next 10 years in private equity real estate, co-founding LXI REIT Advisors in 2017. Simon's role covers a wide range of areas, including formulating LXI's investment strategies and products, raising equity and debt finance, asset selection, and negotiating and implementing transactions with vendors, purchasers, developers, investors, lenders and joint venture partners.
Freddie Brooks
Freddie leads on all strategic financial matters including fund reporting, budgeting and forecasting, treasury management and the monitoring of internal controls. Freddie is both a qualified Chartered Accountant (ACA) and Chartered Surveyor (Property Finance & Investment pathway). He has significant experience in the property sector and previously worked advising similar businesses at the number one audit firm and advisor to UK REITs, as well with private property funds, developers and contractors.
Directors of the Company
On 13 January 2022, the Company announced that Stephen Hubbard (Non-Executive Chairman of the Company) and Colin Smith OBE (Non-Executive Director and Senior Independent Director of the Company), had each informed the Board of their respective intentions to step down from the Board ahead of the Company's 2022 Annual General Meeting and resign as Directors of the Company on the same date. In addition, on 13 January 2022 the Company also announced the following appointments (effective 13 January 2022):
- Cyrus Ardalan as the Company's Chairman Designate, with the intention to take over from Stephen Hubbard as Chairman of the Company at a date to be confirmed prior to the Company's 2022 Annual General Meeting;
- Hugh Seaborn as the Company's Non-Executive Senior Independent Director Designate, with the intention to take over from Colin Smith OBE as Senior Independent Director of the Company at a date to be confirmed prior to the Company's 2022 Annual General Meeting; and
- Ismat Levin as a Non-Executive Director of the Company.
Accordingly, the Directors are as follows:
Stephen Hubbard, non-executive Chairman
Stephen Hubbard previously served as Executive Chairman of UK CBRE Group, the world's largest property advisory firm. Before that Stephen served as Co-Head of CBRE Capital Markets Europe. He joined Richard Ellis in 1976 and served as Head of EMEA and UK Capital Markets from 1998 to 2012. He is also a member of the Advisory Board for Redevco which is a pan-European property holding company. In July 2020, Stephen became the Chairman of Workspace Group plc, having served as a non-executive director since July 2014.
Colin Smith OBE, non-executive Director
Colin Smith OBE served for ten years as Chairman of Poundland Group Holdings, Europe's largest single price discount retailer. Prior to this, he was Chief Executive and Finance Director of Safeway Plc, the national supermarket retailer. Colin served as Chairman of Hilton Food Group plc between 2016 and 2018, having previously served as a non-executive director since 2010. He also has experience in the not for profit sector, formerly serving as Chairman of The Challenge Network, as a trustee of Save the Children and as Chairman of the food industry sponsored Red Tractor assurance scheme. Colin has been appointed as the Company's Senior Independent Director.
Jeannette (Jan) Etherden, non-executive Director
Jan Etherden has over 35 years' experience in the investment industry, as an analyst, fund manager, then a non-executive director. Previously head of UK equities for Confederation Life/Sun Life of Canada, she joined Newton in 1996 as a director specialising in multi-asset segregated portfolios and also was their Investment COO from 1999 to 2001. Subsequently she worked with Olympus Capital Management as business development manager for specialist hedge fund products. She is a director of Miton UK MicroCap Trust plc and has previously served on the Boards of Ruffer Investment Company Ltd and TwentyFour Income Fund Ltd.
John Cartwright, non-executive Director
John Cartwright was formerly Chief Executive of The Association of Real Estate Funds (AREF) from 2009 to 2019. His responsibilities as Chief Executive of AREF were to represent and promote the interests of members, promote best practice in fund governance and ensure the smooth running of the association. Prior to this, John was with M&G Real Estate (formerly PRUPIM) for nearly 35 years in a variety of roles; latterly as Head of Institutional and Retail Funds and a member of PRUPIM's Board and Investment Committee. He has more than 20 years' experience of managing pooled and segregated accounts for both retail and institutional investors. John is also a member of the Investment Committee of Lothbury Property Trust.
Patricia Dimond, non-executive Director
Patricia Dimond has had an international career with over 30 years in consumer and financial markets. As an Executive or Strategic Advisor, she has worked with FTSE 100, Private Equity and owner managed companies. She is an investor in early stage technology ventures, with an expertise in Fintech. Patricia is an alumnae of McKinsey, 1994-1999 and a Chartered Financial Analyst (CFA), 2006. She qualified, with Deloitte, as a Chartered Accountant (CA) in 1985, and holds an MBA from IMD Switzerland, 1993. Patricia currently serves as a Non-Executive Director for the English National Opera, where she is Senior Independent Director (SID) and Chair of Audit and Risk, and, as a non-executive director of Foresight VCT plc.
Cyrus Ardalan, Chairman Designate
Cyrus is a highly experienced international investment banker with well-established corporate governance expertise and successful credentials as chairman. His career in capital markets spans over 40 years during which he has held senior executive and non-executive roles at leading global banks. He is currently the Chairman of the Board at OakNorth Bank and was previously non-executive director and Chairman of a number of institutions, including Citigroup Global Markets, the International Finance Facility for Immunisation and the International Capital Markets Association. Cyrus spent 15 years at Barclays Bank as Vice Chairman overseeing a number of areas including the bank's Public Policy and Government Relations units. Prior to this, he held a range of senior positions at Paribas and The World Bank.
Hugh Seaborn CVO, non-executive Director
Hugh brings over 35 years of real estate experience. He spent 13 years as a non-executive at TR Property Investment Trust plc, including four years as Chair, and is currently the CEO of Cadogan. He founded and chairs two Business improvement Districts, The Knightsbridge Partnership and The King's Road Partnership, and is Chair of the Knightsbridge Business Group. Previously, he was CEO of The Portman Estate and prior to that Director and Head of Investment Management at CBRE. Formerly, Hugh has been a member of the Council of the Duchy of Lancaster, Chair of the Westminster Property Association, Chair of the Estates Business Group, and a member of the Property Advisory Committee for the Natural History Museum. He is a Chartered Surveyor.
Ismat Levin, non-executive Director
Ismat has 28 years' experience in commercial, international growth and legal technology-led software industries across NASDAQ-listed and private equity contexts, including as a Board observer. She is currently Executive Vice President and Group General Counsel at Synamedia Limited. Before this, Ismat spent almost 20 years at NDS Group as Vice President and Group General Counsel as it grew from a start-up investment owned by News Corporation, to being a NASDAQ listed company for 10 years, to being sold to Cisco Systems, Inc. for $5 billion. Ismat began her career at Dentons LLP.
Important Information
This announcement is an advertisement for the purposes of the Prospectus Regulation Rules of the UK Financial Conduct Authority ("FCA") and does not constitute a prospectus. Investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in the quadripartite prospectus (comprising a summary, registration document, supplement and securities note) expected to be published by LXi REIT plc shortly, the "Prospectus"), and not in reliance on this announcement.
The Prospectus, when published, will be available, subject to certain access restrictions, on the Company's website (www.lxireit.com/company-documents), at the Company's registered office at 125 London Wall, London, EC2Y 5AS, and, at the National Storage Mechanism via https://data.fca.org.uk/#/nsm/nationalstoragemechanism. Approval of the Prospectus by the FCA should not be understood as an endorsement of the securities that are the subject of the Prospectus. Potential investors are recommended to read the Prospectus before making an investment decision in order to fully understand the potential risks and rewards associated with a decision to invest in the Company's securities. This announcement does not constitute, and may not be construed as, an offer to sell or an invitation or recommendation to purchase, sell or subscribe for any securities or investments of any description, or a recommendation regarding the issue or the provision of investment advice by any party.
Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of an RIS announcement, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company. This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase investments of any description or a recommendation regarding the issue or the provision of investment advice by any party. No information set out in this announcement is intended to form the basis of any contract of sale, investment decision or any decision to purchase shares in the Company. Approval of the Prospectus by the FCA should not be understood as an endorsement of the securities that are the subject of the Prospectus. Potential investors are recommended to read the Prospectus before making an investment decision in order to fully understand the potential risks and rewards associated with a decision to invest in the Company's securities.
The content of this announcement, which has been prepared by and is the sole responsibility of the Company, has been approved by Alvarium Fund Managers (UK) Limited as a financial promotion solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended). This announcement is not intended to be investment advice and should not be relied upon in deciding whether to invest. Investors should seek independent professional advice in relation to the legal, taxation, financial and other consequences of any investment described in this document, including the merits of investing and the risks involved. Alvarium Fund Managers (UK) Limited is authorised and regulated by the Financial Conduct Authority and registered in England (No. 09921853), with its registered address at 10 Old Burlington Street, London, W1S 3AG.
This announcement is not for release, publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia, collectively, the "United States"). This announcement is not an offer of securities for sale in or into the United States. The New Ordinary Shares have not been, and will not be, registered under the US Securities Act 1933, as amended (the "US Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered or sold into or within the United States, absent registration under, or except pursuant to an exemption from the registration requirements of, the US Securities Act, and in compliance with any applicable securities laws of any state or other jurisdiction in the United States. No public offering of securities is being made in the United States.
In addition the Company has not been and will not be registered under the US Investment Company Act of 1940, as amended.
Further, this announcement is not for release, publication or distribution into Australia, New Zealand, Canada, Singapore, the Republic of South Africa, Japan or any member state of the EEA (other than any member state of the EEA where the Company's securities may be lawfully marketed) or any other jurisdiction where such distribution is unlawful.
The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Each of Peel Hunt LLP ("Peel Hunt"), Jefferies International Limited, and, Alvarium Securities Limited ("Alvarium Securities"), each of which are authorised and regulated in the United Kingdom by the FCA and Jefferies GmbH, registered in Germany and authorised and regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht (together, Jefferies International Limited and Jefferies GmbH, being "Jefferies"), is acting exclusively for the Company and for no-one else and will not regard any other person (whether or not a recipient of this announcement or the Prospectus) as its client in relation to the Subsequent Issue, the Share Issuance Programme and the other arrangements referred to in the Prospectus and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in connection with the Subsequent Issue, the Share Issuance Programme, Subsequent Admission and the other arrangements referred to in this announcement and in the Prospectus.
The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. Figures refer to past performance and past performance is not a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.
This announcement contains forward looking statements, including, without limitation, statements including the words "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. Such forward looking statements involve unknown risks, uncertainties and other factors which may cause the actual results, financial condition, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. The Company, the Investment Advisor, the AIFM, Peel Hunt, Jefferies and Alvarium Securities expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Prospectus Regulation Rules of the Financial Conduct Authority, the UK Market Abuse Regulation or other applicable laws, regulations or rules.
The information in this announcement is for background purposes only and does not purport to be full or complete. None of Peel Hunt, Jefferies or Alvarium Securities, or any of their respective affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. Peel Hunt, Jefferies and Alvarium Securities, and their affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise be found to have in respect of this announcement or its contents or otherwise arising in connection therewith.
In connection with the Subsequent Issue, Peel Hunt, Jefferies and/or Alvarium Securities, and any of their affiliates, may take up a portion of the New Ordinary Shares as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such New Ordinary Shares and other securities of the Company or related investments in connection with the Subsequent Issue or otherwise. Accordingly, references in the Prospectus to the New Ordinary Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, Peel Hunt and any of its affiliates and/or Jefferies and any of its affiliates and/or Alvarium Securities and any of its affiliates acting in such capacity. In addition Peel Hunt, Jefferies and/or Alvarium Securities, and any of their affiliates may enter into financing arrangements (including swaps or contracts for differences) with investors in connection with which Peel Hunt, Jefferies and/or Alvarium Securities, and any of their affiliates may from time to time acquire, hold or dispose of Ordinary Shares. Peel Hunt, Jefferies and Alvarium Securities do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.
Information to Distributors
Solely for the purposes of the product governance requirements contained within: (a) the UK's implementation of EU Directive 2014/65/EU on markets in financial instruments, as amended ("UK MiFID II"); and (b) the UK's implementation of Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing UK MiFID II, and in particular Chapter 3 of the Product Intervention and Product Governance Sourcebook of the FCA (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the New Ordinary Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in UK MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by UK MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors (such term to have the same meaning as in the MiFID II Product Governance Requirements) should note that: the market price of the New Ordinary Shares may decline and investors could lose all or part of their investment; the New Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the New Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Subsequent Issue and/or Share Issuance Programme. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Peel Hunt, Jefferies and Alvarium Securities will only procure investors (pursuant to the Subsequent Issue) who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of UK MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Ordinary Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the New Ordinary Shares and determining appropriate distribution channels.
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