L&G said the move would bring together the complementary capabilities of the two businesses, and accelerate L&G’s private markets growth ambitions
Legal & General (L&G) has agreed to buy a 75% stake in global real estate private equity firm, Proprium Capital Partners.
The asset manager said the move would bring together the complementary capabilities of the two businesses, and accelerate L&G's private markets growth ambitions – both broadening the real estate capabilities of the firm and unlocking new geographies.
As part of the acquisition, L&G said it will commit up to $300m (£224m) of capital to support Proprium's future fund strategies.
Founded in 2013, Proprium is a spin-out of the Morgan Stanley Real Estate Special Situations team, which focuses on investing in real estate operating companies with scalable investment themes and experienced management teams.
Proprium's strategy of platform investing seeks to deliver private equity returns in the real estate industry.
Proprium is active across residential, student accommodation, hospitality, and logistics sectors – with current investments including a&o hostels in Germany, Admiral Taverns in the UK, and Avid in Australia.
In the last 18 months, Proprium has sold more than $1.8bn (£1.3bn) of assets; acquired $1.6bn (£1.2bn) of assets, including the recently announced public to private of AVJennings; and has distributed more than $800m (£598m) to investors and secured over $600m (£449m) in equity commitments.
L&G said the US, continental Europe and select APAC markets represented key strategic growth areas for its private markets platform, offering diversification for clients as well as expanding the investment opportunities in subsectors benefiting from structural trends such as demographic change and deglobalisation.
It said for clients seeking capital growth in an environment of elevated interest rates and heightened structural risks, value-add strategies in these sectors – focused on active management and operational excellence – can sit in a compelling position within the risk-return spectrum.
As part of the acquisition, Proprium's management team will continue to operate independently from an operational, day-to-day perspective, maintaining its current leadership structure, teams and investment process.
L&G asset management chief executive Eric Adler said: "Recognising that international scale in private markets is key to delivering against L&G's growth strategy, this strategic investment in Proprium will expand our geographical footprint, deepen our capabilities, broaden our investment strategies, and diversify our product offering. Through this acquisition, we are bringing clients a differentiated and diversified opportunity to access value creation in real estate sectors positioned for growth and scalability."
L&G global head of private markets Bill Hughes added: "In the last 12 months we have significantly accelerated the growth of our private markets platform, laying the foundations for achieving our ambitious target of £85bn by 2028.
"This growth trajectory is fuelled by our commitment to deliver exceptional investment outcomes that attract third party capital, and today's announcement further demonstrates our strategic direction and plans in action."
He continued: "The partnership with Proprium will strengthen L&G's investment capabilities and broaden our product offering, allowing us to bring a select range of strategies that aim to deliver the higher returns that many global investors are seeking. Benefitting from Proprium's expertise and entrepreneurial approach, combined with L&G's scale and balance sheet capital to catalyse opportunities, we believe the partnership will unlock substantial growth in new markets and drive significant value for our clients."
Proprium Capital Partners co-managing partners Tim Morris and Philipp Westermann added: "On behalf of the Proprium team, we are incredibly excited about the partnership with L&G, their financial backing and growth ambitions. Their investment opens new doors to international markets as L&G builds out its global real estate business, representing a significant milestone in the evolution of our platform at a time of immense opportunity."
This transaction is expected to close by Q4 2025, subject to regulatory and anti-trust approvals.
