Investment firm M&G Real Estate has acquired nearly two thirds of fund manager BauMont.
According to M&G, the deal was made in order to add investment capabilities in areas where active management owned the potential to “deliver alpha” to clients over the medium-to-long term.
Under the deal, BauMont will link with M&G’s real estate business, allowing the latter to expand its client proposition beyond its established core commercial, residential, and debt strategies. The deal will benefit BauMont, M&G said, through the access it gains to the firm’s pan-European real estate platform.
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.”
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He added: “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.”
Separately, 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.
See also: Building foundations: Rethinking financial risk in the European real estate sector
Investor intention surveys have shown that European and Asian investors see the market potential of value-add real estate strategies, especially at this point in the cycle. As urbanisation and economic growth continue to drive demand for high-quality real estate, value-add is poised to play a crucial role in the real estate allocations of global institutional investors.
This is not the only Franco-centric development made by M&G this year. Back in January, Portfolio Adviser Europe reported that the firm had named Kelly Hébert to be its new head of country, extending her role out from leading Belgium and Luxembourg to include one of Europe’s richest nations. It was around this time that the firm also appointed Otto Donner to lead up its business within the Nordic regions.
