Icelandic retail investor Baugur has joined two other partners in a £500m property fund that will aim to buy British food stores and retail parks.

Baugur has taken a 10% stake in the fund, called LxBII, while HBOS and West Coast Capital, an investment company owned by Scottish entrepreneur Sir Tom Hunter, will own over 40% each.

Earlier this year Baugur pulled out of a consortium preparing a bid for supermarket group Somerfield after senior executives at Baugur, including its chief executive Jon Asgeir Johannesson, were charged with fraud. The executives deny the charges.