The full acquisition of the A$6 billion ($4.3 billion; €4.1 billion) Australian real estate manager will immediately give Barings an established fund management platform with 44 real estate equity professionals focusing on value-add strategies across industrial, office, retail warehouse, residential and other sectors in Australia and New Zealand. PERE understands that the founders of Altis have signed up for long-term employment contracts with Barings for at least five years.
Charles Weeks, head of Europe and Asia-Pacific real estate equity, told PERE that Altis will retain its name for at least the next year and there will be a “fairly light touch approach” on the integration of the two entities. Prior to the acquisition of Altis, Barings had not made any real estate equity investments in Asia-Pacific. Upon the completion of the deal, the Altis team will sit alongside Barings’ existing three-person Asia real estate debt team in Australia. To date, Barings has deployed more than A$300 million in real estate debt in Asia-Pacific.
“This is really about a strategic move for Barings to set up an Asian platform,” said Weeks. “The first and the easiest step is the Australian step, and it’s really driven by the desire of Barings to globalize their asset management businesses.” With boots on the ground, Weeks believes Barings can finally look to deploy real estate equity in the region.
Indeed, Barings has been seeking to establish a real estate equity platform in Asia-Pacific since 2019, when Weeks’ role was expanded to head of Europe and Asia-Pacific real estate equity, PERE previously reported. His main objective in his expanded role was to establish an Asian real estate investment management business of a similar depth to Barings’ operations in Europe.
In Europe, the firm grew its platform via a combination of organic growth and M&A transactions. In fact, Weeks became part of Barings through its European expansion, which started with the manager, then known as Cornerstone Real Estate Advisers, purchasing his former firm, the European manager Protego, in 2010. The acquisition of Pamera Asset Management in Germany followed four years later, in a deal that bolstered Barings’ assets under management by €1 billion.
In Asia-Pacific, it is understood that talks between Barings and Altis started as early as 2019, but negotiations did not make meaningful progress until 2020, when Barings hired John Ratcliffe as managing director and head of Asia-Pacific real estate in Australia. As the sole representative of Barings’ real estate equity team in Asia, Ratcliffe was tasked with getting the acquisition over the line.
Paul Notaras, executive director at Altis, told PERE that it was a “big step” for the founders to sell the business, and the firm had been approached by many different groups over the years. However, he believed being a part of Barings would help the Altis platform to achieve the next stage of its growth. “Being part of a global business that has that distribution and capital is important,” he explained.
“We have had lots of conversations with Charles’ team in Europe. He has a similar background to us where he sold his business to Barings 10 years ago. And for us that was a terrific test case because nearly all the founders of those couple of acquisitions in Europe are still there. From our perspective, we want to be here in five to 10 years as well,” Notaras explained.
With the first stage of its Asia real estate build-out now complete, “Barings will be engaging Altis in expanding the real estate business in the region. Altis will also continue to focus on delivering its existing business plan for its current funds and mandates,” said Weeks. With more than 200 investment professionals across 16 offices in nine countries, Barings’ global real estate platform now has AUM of $48.9 billion.