CBRE nears ING deal; Clarion in management buyout

The Los Angeles-based investment manager is expected to announce imminently a deal to buy ING REIM’s Europe and Asia businesses, while the management of ING Clarion will lead a buyout of the US arm.

Richard Ellis is set unveil a deal to acquire the Europe and Asia business of ING Real Estate Investment Management (REIM) imminently while ING Clarion is expected to be involved in a management buyout of the US group, PERE has been told.

The Los Angeles-based firm could announce the takeover of a substantial portion of ING REIM this week or early next, people familiar with the matter have said. The deal is expected to involve ING REIM’s Europe and Asia fund and investment management platforms, and possibly include the US real estate securities arm of ING Clarion.

New York-based ING Clarion is not expected to be part of any final transaction with CBRE, sources have said. Instead, ING Clarion’s management, led by chief executive officer Stephen Furnary, is set to regain control of the firm, which was merged with ING in 1998. CBRE Investors and ING Clarion did not return calls for comment.

ING Clarion originally was founded as Jones Lang Wootton Realty Advisors by Furnary and his partners in 1982, before they bought out the minority investor and renamed the firm Clarion Partners.

A management buyout of ING Clarion was among a range of possible disposition options when ING REIM was first put up for sale by its Dutch insurance company parent in June 2010. Morgan Stanley was appointed at the time to market the sale of ING REIM, which has more than €65 billion in assets under management and is located in 20 countries with 1,500 real estate professionals and support staff.

Traditionally focused on core and core-plus/value-added strategies, ING Clarion manages roughly a half dozen commingled funds and around 17 separate account relationships. Over the past few years, it has ventured increasingly into opportunistic deals and, in January, partnered on William Macklowe’s first real estate deal without his father, Harry, paying $45.2 million for the Manhattan office property at 636 Avenue of the Americas.

Last month, CBRE emerged as the frontrunner to purchase the bulk of ING REIM, after facing down competition from Jones Lang LaSalle, TPG Capital and Ares Capital Management. A takeover of the Europe and Asia platforms is likely to see ING REIM merged into CBRE’s existing investment management platform, CBRE Investors, led by Matthew Khourie, sources added. A tie-up between CBRE Investors and ING REIM would create one of the largest real estate investment managers in the world.

One of the sticking points had been ING Group’s call for buyers to take over its GP co-investment position in ING REIM’s real estate funds. That is expected to take place in the deal unveiled tomorrow.

The sale process of all or parts of ING REIM has been going on for more than a year. It began when parent company ING Group announced in October 2009 that ING REIM was to be sold by the end of 2013 as part of a wider strategy to divest its insurance and investment management businesses. The strategy followed a decision to concentrate on its core banking operations after pressure from the European Commission over the €10 billion of state aid it had received in the aftermath of global economic downturn. ING REIM subsequently was made a separately-managed global entity within ING Commercial Banking, but it remained on its list of ‘non-core’ businesses.