M&G Real Estate has acquired a 65% stake in Capital Limited (BauMont). The acquisition is part of M&G’s strategy to selectively add investment capabilities in areas where active management has the potential to deliver alpha to clients over medium to long-term investment horizons.
BauMont will join forces with M&G’s c. €47.6b global real estate business, enabling M&G to expand its client proposition beyond its established core commercial, residential and debt strategies – and the ability to invest throughout the full property cycle, unlocking potential returns through active management. In turn, BauMont will benefit from M&G’s significant pan-European real estate platform, alongside its global distribution capabilities that have been expanded in recent times to meet the growing needs of institutional investors in Europe and Asia.
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 c. €15.5b real estate allocation.
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. 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.”
Robert Balick, Managing Partner at BauMont, added: “European real estate markets are adjusting to the higher rate environment and are entering a new cycle of growth where demand is focused on a limited supply of highquality assets. Value-add strategies can take advantage of re-set entry pricing, whilst actively repositioning assets to meet the needs of modern occupiers. We are delighted that M&G is becoming a majority shareholder in our business and we look forward to unlocking the significant growth opportunities that this strategic partnership will create to deliver enhanced value to our investors.”
M&G Real Estate was advised by CBRE Investment Banking.
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