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Clarion poised for recap – exclusive

A substantial stake in the $38 billion real estate investment manager is for sale as its private equity owner seeks a recapitalization.

Lightyear Capital, which acquired a 75 percent interest in Clarion from Dutch financial services company ING Group in June 2011 for approximately $100 million, is believed to be sounding out bids for its investment.

The firm acquired its stake on behalf of its third fund, Lightyear Fund III, which collected a total of $954 million in 2011, according to PEI Research & Analytics.

ING, which had owned Clarion for 12 years, sold the business as it sought to divest its real estate operations, among a number of other businesses, following the global financial crisis. 

Clarion’s management, which spun out of ING at the time, acquired the other 25 percent. 

The management are not thought to be looking to sell their interest. 

Morgan Stanley, the investment bank, is believed to be involved in the sale. Guy Metcalfe, chairman of real estate banking at the bank is understood to be leading a process to determine potential bidders.

Lightyear, also New York-based, is focused on making primarily control investments in North America-based, middle-market financial services companies. 

Under Lightyear’s ownership, Clarion has grown from approximately $22 billion of assets under management in June 2011 to $38 billion in assets today. 

Founded in 1982 by chairman and chief executive Stephen Furnary, Clarion currently has approximately 275 employees across seven offices in the US, São Paulo and London.

Clarion and Morgan Stanley both declined to comment, while Lightyear did not respond to a request for comment.

-Jonathan Brasse contributed to this story.