Lathe will act as the fund manager and will look to buy district shopping centres anchored by a supermarket or convenience store. In selecting properties the fund manager looks for a spread of income, rents that are affordable to retailers and good car parking facilities. Readleaf IV will be mainly focused in the south-east and east of England and will be targeting lots of between £10 million ($16 million) and £35 ($55 million).

The fund is structured as a limited partnership to provide tax transparency for international investors. Shareholders in Lathe's existing Redleaf funds are investing again alongside new UK and international investors. The fund has a target internal rate of return of 20%, compared with the 27% pa after costs achieved by the Redleaf I fund.

Lathe Investments' director Ian Knight said: "Our experience of regional and district shopping centres leads us to believe that, despite the general economic slowdown, the outlook for such investments remains good. Our confidence is further underlined by the fact that we have already secured £8 million ($13 million) of private equity for the fund, most of which is from existing shareholders who are investing with us again."