EUROPE - Schroders has bolstered its European property focus after purchasing 99.75% of the share capital of German pan-European asset manager Aareal Asset Management GmBH (AAM), in a deal worth an initial €28m.
AAM has €1.9bn assets under management, managing seven property funds across European markets. The company is headquartered in Wiesbaden with offices in Amsterdam, Milan, Luxembourg, Stockholm and Paris. Pension funds, insurance companies and government organisations make up its client base.
William Hill (pictured), global head of property at Schroders, stated: "Because people have got more money in real estate, they're much more willing to look outside their own domestic markets for investment. Schroders took a business decision 15 years ago to move its business from... the UK into one which had a more international focus to it."
Hill said Schroders had been looking for a European "partner" for the past 12 months and described Aareal, which was bought from parent Aareal Bank AG, as a "perfect fit".
"They had no UK presence and we had no continental European presence, so by putting the two together we got almost the dream scenario."
Mike Clark, head of property distribution at Schroders, said: "This acquisition isn't designed necessarily to provide access for UK investors into continental Europe, we see our client base as international and that will mean we have structures to accommodate both German institutional investors as well as institutional investors from all around the world."
Schroders has also agreed to acquire certain investments owned by Aareal, in the underlying funds managed by AAM that are currently valued at €21.4m, and may acquire further investments managed by AAM for up to €29.8m.
AAM will form part of Schroders' property business, which currently has £7.6bn of assets under management. In the last 12 months, Schroders has launched two European property funds of funds which provide investors with diversified exposure to European real estate, and global and Asian property securities funds.
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