Midlands financier Paul Bassi’s quoted property investment vehicle Real Estate Investors (REI) has been given a glowing health check by city analysts.
A research report by Kaupthing Singer & Friedlander Capital Markets titled Finessing the Cycle reasons that REI is well placed to ride out the credit crunch and indeed can make strategic gains during the downturn.
Mr Bassi is chairman of Kaupthing Bank in the Midlands, where he is supported by Institute of Directors’ chairman and former KPMG partner Richard Boot and former Wragge & Co senior partner John Crabtree.
The Finessing the Cycle report said: “Led by Paul Bassi, one of the best connected property entrepreneurs in the West Midlands region, REI has the experience, focused strategy and £100 million acquisition firepower to offer investors ‘opportunity fund’-style exposure to the commercial property market downcycle.”
The report emphasises Paul Bassi’s strength in the West Midlands region.
“Management’s close links into dominant regional property services firms Bond Wolfe and Bigwood provide REI with a much more powerful radar than investors might expect from a business of its size. We therefore assume that acquiring a portfolio of £120 million to £150 million is achievable by end 2010 and attainable without compromising on the asset selection required to maintain the current trajectory of 20 to25 per cent on project capital.”
It sums up REI’s management team as a “Sector Bantamweight ... Local Heavyweight”.
“In stark contrast to its sub-Small Cap size, REI can draw upon commercial property experience and human capital far greater than investors might expect. The team of seven people includes finance director Marcus Daly.
“Paul Bassi is committed to REI as his primary commercial property investment vehicle.
“Demonstrating this commitment, he has bought 32.4 million shares in the market since the December 2006 £3.6 million (weighted-average price 11.1p), taking his stake in the company to 22 per cent.”
The report sums up REI’s prospects: “As a well capitalised, focused operator, REI should be able to acquire more cheaply and generate better returns in this phase of the property cycle than would previously have been possible.”
Mr Bassi said: “Through REI, investors have an opportunity to capitalise on the downturn.”
