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The fund, called Nice Residential III IC, will purchase below market value properties that become available in the current stressed markets and in particular those properties being offered by distressed sellers.

The fund aims to return upwards of 15 per net of fees, with an annual volatility target of 5 per cent and returns will be maximised through conversions and multi-letting the properties.

The fund has a minimum investment of £50,000 and will target absolute returns from a diverse range of real estate investment opportunities. It will focus on emerging London locations with lower purchase values and higher yields, as well as areas earmarked for planned transport infrastructure investment and regeneration projects

Target locations will be between London zones two and three.

The Guernsey-domiciled fund is available to private and corporate investors and is targeting around £20m investment after initial launch.

As well as the £50,000 share class there is an institutional class with a minimum investment of £500,000, and shares will be available in Euro and US dollars subject to demand.

Martin Skinner, chief executive officer of Nice Capital, said: "It's a counter cyclical, opportunistic fund. We can make excellent returns by purchasing property at levels below market value due to markets under stress, and moreover, it is an opportunity to make those returns at a time when other strategies are faltering.

"The diversification they will get through a well managed property fund vehicle will provide better insulation against market risk as opposed to buying individual properties directly."