LONDON (Reuters) - Fund manager Henderson HGGH.L and North American fund TIAA-CREF have joined forces to form a 13 billion pound ($20 billion) real estate fund, the latest in a series of alliances driven by growing investor demand for money managers to bulk up.
The new venture will be called TIAA Henderson Global Real Estate and will combine both funds’ European real estate businesses and Henderson’s Asia Pacific property operation.
TIAA-CREF, which will hold a 60 percent stake in the new venture, will buy Henderson’s North American real estate fund as part of the deal, making a 114 million pound payment to Henderson. No further financial details were provided.
Growing investor demand for real estate fund managers to put their own money into deals was a major reason behind the tie up, Henderson said. TIAA-CREF will invest $1.5 billion over the next five years, far exceeding any sums Henderson could muster on its own.
The real estate fund management industry has been under pressure since the financial crash as smaller funds find it more difficult to raise money, attract high-quality staff and benefit from efficiencies of scale to deliver the high returns demanded by investors.
Last month Blackrock (BLK.N), the $4 trillion U.S. fund manager, bought private equity real estate fund MGPA in a deal that boosted the former’s presence in Asia. ($1 = 0.6498 British pounds)
Editing by David Holmes