M&G Real Estate has acquired a 65% stake in BauMont Real Estate Capital (BauMont) for an undisclosed price.
The European real estate fund manager, which specialises in value-add investment strategies in Western Europe, was established in 2017 and has €1.5bn of assets under management.
The acquisition is part of M&G’s strategy to “selectively add investment capabilities in areas where active management has the potential to deliver alpha to clients over medium to long-term investment horizons”.
M&G’s with-profits fund – which invests and manages the long-term savings on behalf of 4.6 million UK policyholders – is investing €200m in BauMont’s latest fund and is seeking to secure higher returning opportunities in European value-add property in the UK and France for its wider £13bn real estate allocation.
Tony Brown, global head of M&G Real Estate, said: “This new partnership is an opportunity to broaden the real estate strategies we offer at a time when the asset class is back in focus for global institutional clients who are considering increasing their allocations at this stage in the cycle. Throughout our extensive history of real estate investing, we have continued to strive for excellence and can now provide clients with a compelling proposition throughout the real estate cycle – and across the capital stack. We look forward to a long and successful partnership with BauMont.”
Robert Balick, managing partner at BauMont, added: “European real estate markets are adjusting to the higher rate environment and are entering a new cycle of growth where demand is focused on a limited supply of high- quality assets. Value-add strategies can take advantage of re-set entry pricing, whilst actively repositioning assets to meet the needs of modern occupiers. We are delighted that M&G is becoming a majority shareholder in our business and we look forward to unlocking the significant growth opportunities that this strategic partnership will create to deliver enhanced value to our investors.”
M&G Real Estate was advised by CBRE Investment Banking.
