Henderson Global Investors, the Anglo-Australian fund manager, will become a member of a $US63 billion ($68 billion) global real estate business after a deal struck between its British parent and a US financial services group.
Under the plan, Henderson Group PLC has combined with the Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF) to create a global real estate investment trust in London. The combined real estate assets under management for the newly formed TIAA Henderson Global Real Estate and TIAA-CREF is about £41.5 billion ($69 billion).
Henderson, which is dual-listed in Britain and Australia and was spun out of AMP in 2003, will own 40 per cent of the fund and will use TIAA's balance sheet for extra capital.
As part of the deal, Henderson will sell all of its North American real estate business for cash to TIAA-CREF for £114.2 million, further strengthening its balance sheet and capital position.
The new TIAA Henderson Global Real Estate group will consist of TIAA-CREF's European real estate business, Henderson's European and Asian real estate businesses, and a new global distribution and client service agreement for all of TIAA-CREF's real estate clients.
It is expected that Australian assets will also be on the new fund's radar.
The alliance will provide access to global capabilities in the office, retail, logistics, residential and commercial real estate debt sectors.
Henderson Group chief executive Andrew Formica said the deal would make Henderson a simplified business with "core strengths in global and European equities, absolute return, multi-asset and global fixed income investment management".