BlackRock, the US investment and asset management firm, is playing its part in the consolidation of the European property fund industry by merging the open-ended BlackRock UK Property Fund with the RREEF UK Retail, Office and Industrial Property Funds.
BlackRock, with nearly $3.7 trillion of assets under management, said today it would add 64 investors to its fund as a result of the merger, as well as an extra 27 investments totaling more than £335 million (€412 million; $543 million).
The US behemoth added that the merger created the UK’s largest property unit trust and increased exposure to its fund’s largest subsectors of central London offices, retail warehouses, south east industrial and south east offices. Overall, it will grow the BlackRock UK Property Fund from £2.1 billion of assets to more than £2.4 billion following the positive unit holder vote on December 14.
In a statement, BlackRocksaid the transaction not only provided greater diversification and opportunity in terms of assets, but also increased and further diversified the fund’s client base, giving them access to “a long standing UK real estate platform with a strong, long term performance track record”.
In preparation for the merger, BlackRock bolstered its UK real estate investment team by appointing Justin Brown as managing director and the fund’s portfolio manager, Mark Long as director of research and strategy and John Benham as a vice president and asset manager. It is believed that none of the RREEF staff have transferred to BlackRock.
Marcus Sperber, head of BlackRock’s international real estate business and fund director, said in a statement: “This is a landmark merger for the UK property funds industry, bringing together two well-known names and offering several benefits for investors.” He noted that the fund, on behalf of more than 400 institutional investors, had the scale to invest in “quality assets” that might not be available to other funds.