Property vehicle's AIM float scuppered

Merrill Lynch has pulled the float of NewRiver Retail, a vehicle to buy up retail properties at rock-bottom prices, after investors failed to stump up the minimum £100 million needed.

The company had been hoping to raise £250 million by issuing 110 million shares, in what which would have been the biggest initial public offering in London so far this year. Lockhart, NewRiver's chief executive, is believed to be hoping to return to the market in autumn to try again to raise cash. NewRiver's board boasts several famous faces. Chairman Paul Roy was co-head of Merrill Lynch's global markets and investment banking arm and now chairs the British Horseracing Authority.

Lockhart has a history of calling the bottom of the market and selling out at the top. He founded Halladale in 1991 and sold it two years ago - a couple of months before the start of the credit crunch - pocketing around £12 million himself from the £171 million sale.

Industry experts say that the fundraising is likely to have failed because of the recent glut of companies looking to raise money to capitalise on the big drop in UK property prices.

This week, industrial property specialist Hansteen tapped investors for £200 million to snap up bargains in the distressed sector.