The Nexus Group and partners Alan Proto and Harry Hyman have teamed up to offer a £50m sale-and-leaseback fund on freehold day nurseries.
The PINE Fund, a Jersey-based unit trust, works by buying freeholds of UK day nurseries with at least 45 places and renting the nursery back to the operator on a 15- to 30-year lease.
Mr Proto, founder of the Secret Garden Day Nursery chain, which was sold to Asquith Court in 2003, said, 'It has been expensive to find the costs of building and buying new nurseries. This is a new solution. We built six nurseries in four years and were constantly trying to find money.'
He said that the concept of sale-and-leaseback was quite common in well-developed industries such as the retail sector.
The partners claim that the PINE fund gives providers more funds than traditional debt finance and is cheaper than a combination of debt and private equity funding.
Mr Proto said it would appeal to owners who want to expand their business and those wanting to replace other forms of finance.
Another key group would be nursery owners who want to realise their assets but still be involved in the nursery. 'With this option you can sell the building but carry on running the business and retain the interest and rewards,' he said.
A nursery operator commented, 'Sale-and-leaseback can be a useful tool for raising money in the short term. But you've given away your asset.'
