BlackRock, the world’s largest asset manager, has completed its takeover of Asia and Europe-focused private equity real estate business MGPA.
In an announcement today, BlackRock said its acquisition of MGPA has led to the creation of a business with $23.5 billion of assets, managed on behalf of approximately 700 investors of various types. The combined platform sees the emergence of a business with more than 400 staff across 18 offices and 13 countries.
MGPA will now form part of BlackRock Real Estate, the asset manager’s existing real estate business which forms part of BlackRock Alternative Investors, a division accounting for about $120 billion of the $3.85 trillion of assets currently on BlackRock’s books.
Mark McCombe, BlackRock’s chairman for Asia, described the acquisition as an important part of the firm’s desire to build its regional alternative investment capabilities and in particular its exposure to the real estate asset class. He said: “Bringing on board the MGPA team with such a real estate expertise is an important milestone as we continue to broaden our product set and accelerate our growth in Asia Pacific.”
BlackRock did not reveal the financial details of its acquisition but stated that it was not material to its earnings per share. Reports from various media have suggested that MGPA could have cost somewhere between $140 million and $200 million although this range has since thought to have been on the high side.
The takeover brings together BlackRock’s existing real estate platform, led by former LaSalle Asia head Jack Chandler, which has under management approximately $13 billion of predominantly core equity and debt assets, with MGPA’s more opportunistic business.
The Singapore-headquartered firm has raised approximately $8.6 billion of equity through 11 private real estate funds, including an opportunistic fund series focused on Asia and Europe. BlackRock today can offer its investors with private funds, both open and closed-ended and focused on either equity or debt investments. It also manages REIT securities strategies and separate accounts. According to BlackRock there was “virtually no overlap” of investment strategies between the two organizations.
Chandler said: “This transaction shows our commitment to offer investors access to the most attractive markets worldwide. The combined business will house some of the most talented and experienced real estate investment professionals and most attractive funds in the industry, and we are extremely well-positioned to help clients meet their objectives and liabilities in a low yield and volatile world.”
Simon Treacy, MGPA’s chief executive officer, who has become BlackRock Real Estate’s global chief investment officer, said: “Combining with BlackRock will provide many benefits for our clients and staff as we are joining a firm with a deep fiduciary culture, unrivalled risk management capabilities, and the same commitment we have to delivering superior investment performance.”
“Our combined investment teams and staff provide on-the-ground market coverage that will allow us to expand our activities across the real estate spectrum at a time when allocations to property as both a core allocation and an alternative investment are growing.”