Macquarie sells out of MGPA
Macquarie Bank has sold out of one of the last remaining pre-GFC property funds management operations with the takeover of real estate advisory firm MGPA by US company BlackRock.
Although no details were released, it is understood the terms were about $150 million to $200 million, of which Macquarie's 56 per cent stake could be worth as much as half.
MGPA was formed in early 2004 when current executive chairman Jim Quille led a management buyout of Lend Lease's Global Property Investment Fund unit. Macquarie bought a stake later that year.
The newly combined operations will create a global property funds manager and investor worth about $25 billion. It will have an exposure to the world's top six markets, which represent 75 per cent of the commercial real estate investable universe.
Mr Quille said that MGPA engaged Berkshire Capital Securities LLC in November last year when it became obvious that in order to expand MGPA it needed a partner.
He will stay on as a consultant until the end of next year to oversee the transition of the takeover by BlackRock.
"We believe there has been a sea change in the global real estate sector with more capital inflow tipped for the coming year," Mr Quille said.
"As a result, we felt it was necessary to get a partner that has a focus on the US and European markets.
"BlackRock and MGPA are very similar in size and culture, with each having about $14 billion of funds under management and close to 200 staff. We don't overlap as MGPA is pan-Asia and pan-European."
After the merger, MGPA will roll out its Asia Fund 4 and also run the Asian Special Fund for its German institutional clients.
Mr Quille said while institutions were comfortable owning buildings in their own countries, when investing overseas they mostly prefer investing in a fund.
The global head of real estate for BlackRock, Jack Chandler, said: "The agreement advances BlackRock's growth strategy in Asia-Pacific and Europe, where we are seeking to enhance our local offerings and build on the firm's real estate experience."
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