LAXEY PARTNERS, the activist investor that once tried to break up British Land, will this week launch a £1 billion opportunity fund to buy commercial-property shares.

The corporate raider, run by Colin Kingsnorth, will begin a round of fundraising to secure between £250m and £300m of cash from institutional investors. This will be geared up using a debt facility from Credit Suisse to provide at least £1 billion of buying power.

The fund will be called Terra Catalyst and will be floated on the Alternative Investment Market in February. It will be chaired by Robert Ware, a well-known property entrepreneur and former director of MEPC, which was once Britain’s fourth-biggest listed property group.

Kingsnorth said the Terra Catalyst fund would take advantage of the steep fall in the share prices of commercial-property companies. It is expected to take stakes in and launch full takeover bids for groups it believes are undervalued.

“Unlike many people, we don’t believe the end of the world is nigh for commercial property and there is a great chance to pick up shares. No one seems to be able to see the light at the end of the tunnel, but we do,” said Kingsnorth. “The shares are so cheap that if someone else doesn’t come and take them over, we will.”

Kingsnorth believes that interest-rate cuts will help spur demand for commercial property and that valuations have already reached attractive levels.

Laxey said the fund would be an “active” investor and would not be shy of challenging management teams. It will have a remit to invest in over 300 listed property companies across western Europe, with a collective market value of £187 billion, but is likely to retain a UK focus.

The fund launch comes just days after the Government of Sin-gapore Investment Corporation (GIC), which manages more than $100 billion (£51 billion) of state reserves, unveiled a 3% stake in British Land, whose shares have dropped 47% since their 52-week high of £17.11.

Shares in sector rival Land Securities have fallen 36% from £23 to £14.62.

The fall in property values has been made worse by a number of property funds that have been forced to sell assets in order to return cash to unit holders who have demanded their money back.

However, buyers from Japan, Spain and Germany are again looking closely at the UK and this may prevent further falls.

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