Fortress, Feidos make plays for €12.4bn Europe platform

The two investment managers have been named as suitors for a struggling Milan-listed European real estate investment management company

Fortress Investment Group, the New York based firm and Italian company, Feidos, have separately made offers to inject capital and become new shareholders in struggling real estate investment management company, Prelios.

Media reports suggest Fortress is planning a €100 million capital injection, consisting of €50 million and another €50 million in assets to help struggling Milan-listed Prelios, while Feidos has offered to inject €150 million into the company.

Fortress, which hasn’t commented publicly, is already a financial player in the country through asset management platform Torre, as well as a credit servicing business, Italfondiario.

Prelios has around €12.4 of real estate assets under management and changed its name in 2010 from Pirelli Real Estate following a large restructuring process. However, it is still struggling to pay interest payments on investments and has made a first half loss this financial years of €126 million.

In a statement on Thursday last week, it said offers had been received following a public announcement on August 28 when it flagged interest in the company had come in from third parties.

In the statement, it said its board of directors would consider the approaches in the next few days, most likely on Wednesday. “Therefore, it is not at present possible to advance any information concerning the specific content of each offer received,” the company added.

That recent announcement follows a statement on August 28 when Prelios responded to reports about a possible corporate deal involving the firm. It said: “Regarding rumors which have appeared in the press about the interest of certain investors in initiating possible partnerships with Prelios, the company confirms…that in July it received some preliminary expressions of interest in possible extraordinary transactions from Feidos and Fortress. Following the start of discussions, these parties have sent a letter dated 24 August that confirms their interest in completing due diligence and proceeding with the activities aimed at defining the conditions to be able to formulate a binding offer.”

The company added: “In view of the discussions still in progress, the conditions of the extraordinary transactions have not been defined, and so it is not possible at this stage to provide any information as to the transaction’s final structure.”

Prelios has been listed on the Italian stock exchange since 2002 and manages assets in Italy, Germany and Poland. Its portfolio consists of €11.2 billion of physical property assets, while the remaining €1.2 billion consists of non-performing loans. 

Around €5.4 billion of assets are located in Italy, mainly managed through real estate funds via 22 vehicles managed by subsidiary Prelios SGR. Meanwhile in Germany it has €5.6 billion of assets and €100 million in Polish development projects.