Protego Real Estate Investors, Protego Real Estate Investors Finance LLP and their subsidiaries ("Protego"), the UK and continental European real estate investment management company, announces that it will be acquired by Cornerstone Real Estate Advisers LLC ("Cornerstone").
Protego was established in April 2004 by Iain Reid (CEO), Charles Weeks (Head of Business Development) and Hugo Llewelyn (Head of Investment), since when it has expanded rapidly with 30 staff in the UK and Continental Europe. It opened offices in the Netherlands and Sweden in March 2006 and September 2007 respectively. Protego has approximately $2.5 billion of assets managed and serviced in the UK, Sweden, Finland and Germany.
Cornerstone, a wholly owned subsidiary of the Massachusetts Mutual Life Insurance Company ("MassMutual"), is a real estate investment management company that was established in 1994, and is primarily active in core and value added investment as well as public real estate securities markets. Cornerstone has been active in investing across all property types in the US, including residential, office, hotel, retail and industrial.
The acquisition of Protego provides Cornerstone with a substantial and established European platform with an exceptional institutional client base from the UK as well as Continental Europe. This Protego platform will provide further expansion opportunities in Europe and also a conduit for US capital investing into Europe and likewise for European capital investing into the US. This responds to Cornerstone's and Protego's clients growing appetite for global investment opportunities.
From Protego's perspective, the acquisition provides:
- visible and dependable financial stability;
- enhanced access to capital;
- extended product offerings to clients; and
- extensions to their existing capabilities, initially in securities and research.
Simultaneous to the Protego transaction, Cornerstone will integrate the Real Estate Finance Group (REFG) of Babson Capital Management LLC, also a subsidiary of MassMutual, into Cornerstone, effective in the first quarter of 2010. REFG specializes in commercial mortgage lending and related products and has $21 billion in assets managed and serviced. The newly expanded Cornerstone will become a subsidiary of Babson Capital Management LLC as part of this change.
The consolidation will complement existing Cornerstone and Protego operations in the US and Europe in providing a full investment service to clients including equity and debt as well as public and private markets. In combination, Cornerstone and Protego will manage circa $30 billion of real estate assets, ranking the combined real estate entity as one of the largest managers in real estate globally in terms of assets under management.
Iain Reid, CEO of Protego said: "Having now established a successful, stable and profitable European fund management operation, this acquisition by Cornerstone represents the next stage in the evolution of our business plan. The timing of this transaction is ideal from all parties' perspective as we plan a conduit for two-way transatlantic capital flows between the US and Europe.
"We have had a number of approaches from US and Continental European as well as domestic UK fund management operations wishing to acquire the Protego business since it was established in 2004. We have been speaking with Cornerstone for nearly 18 months and it is clear from our discussions that the two businesses are complementary both in their investment philosophy, business structure and strategy as well as cultural ethos."
Charles Weeks, Head of Business Development said: "From a business development perspective there are significant opportunities arising from the combined operations. We now cover all segments of the market including equity and debt investment as well as public and private markets. This will be extended by Protego's activities in the property derivatives and structured products markets. With now undoubted financial strength as well as a sup