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Nabarro act on ground breaking fund restructuring

3 June 2009

Nabarro acted for The Junction and Aviva Investors on the restructuring of The Junction Fund to secure an injection of £65,000,000 of new equity from AREA Property Partners and the Aviva Life Fund.

The new equity funds a reduction in The Junction's debt. AREA Property Partners will now have a role as asset manager working with Capital & Regional to actively manage the Fund's assets. The life of the Fund has been extended to 2013.

These arrangements were ground breaking in both commercial and legal terms. The market has not seen many large injections of equity into UK funds. Aviva have often been a pioneer in the real estate fund sector. The Junction was one of the first sector funds to be established. It was the first of a wave of funds to go off-shore in 2004. This is another ground breaking development in the Fund's industry where others may follow.

The Nabarro team was led by partner, Deborah Lloyd who said "key to securing such a radical restructuring of the Fund was the ability to make changes on a 75% vote rather than a unanimous vote. This is because the Trust was able to override minority unit holders in circumstances where it was in the best interest of the Fund as a whole. This may be of interest to other fund managers in similar situations".

The lawyers at Nabarro involved were Deborah Lloyd, Lee Sheldon, Edward Morgan and Venn King (Indirect Investments), Ciaran Carvalho and Clare Thomas (Real Estate), Nick Burt, Phil Anderson (Tax), Andrew McLean and Dean Nash (Finance)). AREA were advised by Linklaters. Other firms involved include Berwin Leighton Paisner, Olswangs, Mourant du Feu & Jeune and S J Berwin.