The man who ran the Millennium Dome is planning to start an opportunistic fund to snap up distressed leisure assets.

PY Gerbeau, the ebullient chief executive of Capital & Regional's leisure division, is talking to investors before the market, in his opinion, bottoms out.

“We're not seeing forced sellers yet, but when we do I know what to buy and where to look,” he said. “Ideally, we will begin buying soon, sit on the assets, sweat them a bit, then recycle the capital very quickly.”

Mr Gerbeau, who runs the £882 million X-Leisure fund, the country's foremost leisure property investor, said that he was consulting Hermes and Capital & Regional on setting up a separate fund.

His intentions will surprise many in the investment community, which has seen Capital & Regional Group (C&R), the property asset manager that owns a fifth of the X-Leisure fund, come under pressure this year because of the poor performance of its retail and leisure funds. Some analysts have expected it to become a forced seller.

Figures published last week showed that C&R's X-Leisure fund had fallen in value by almost 8 per cent since the turn of the year. When gearing is applied to the fund, its fall in value has been 15 per cent since January.

C&R's retail funds have performed even worse and the parent company faced the prospect of legal action from some investors, who took advice on whether they could sue the company over the poor performance of its £2.8 billion Mall retail fund. C&R, which reports results on Thursday, has had to complete a rights issue for its Mall fund to avoid breaching loan-to-value covenants.

Another clutch of German assets was sold last week to release cash to reduce the gearing of the parent company and to “significantly strengthen the financial resilience” of the group.

Mr Gerbeau, who is also a director of C&R, said that X-Leisure would make a negative return for the first time since it was set up in 2004. “I'm not used to making negative returns, but that is the market right now,” he said, referring to the sharp fall in commercial property values.

“In the property universe, leisure is not yet big enough to make itself heard. But we are doing much better than retail and offices right now. In the kingdom of the blind, the one-eyed man is king.”

The Frenchman, who began his 15-year career in the leisure industry working for Euro Disney, said that X-Leisure was experiencing strong visitor numbers to its 19 leisure parks, which include two giant Xscape destinations that combine an indoor ski slope with climbing walls, adventure golf, cinemas, restaurants and shops.

“People may not be going on holiday but they will still go to an Xscape for half a day. You can go bowling, to the cinema and have something to eat for £40 a person. That's good value,” he said.

Mr Gerbeau said that the leisure parks business had been supported this summer by an extremely strong release schedule of films: “If we are seeing anything, we are seeing people switching from visiting a leisure park facility twice a week, to one big visit at the weekend, where they may even spend more.”

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