Grosvenor Fund Management, headquartered in London, is closing its US platform to focus on Europe.
The Philadelphia-based investment management operation suffered from management turnover, strategy change and client departure. It had less than $400 million of assets under management at the end of 2014, down from $2 billion in 2006, according to SEC filings.
The firm started its US arm through the 2006 acquisition of Legg Mason Real Estate Services for about $10 million, according to media reports. The entity focused on value-added and opportunistic real estate.
Grosvenor shifted in 2011 to a core real estate strategy and planned, but never launched, a $1.5 billion open-ended fund. Management shuffled around for this new strategy: President Doug Callantine was replaced by co-chief executives Andrew Galbraith and Alexia Gottschalch in 2011. Galbraith left in 2013 and Gottschalch went to JP Morgan Asset Management in August. The remaining US team will be disbanded over time.
“This allows Grosvenor Fund Management to focus new business activity in Europe, where its operations have been expanding in response to investor demand in recent years,” said James Raynor, Grosvenor Fund Management’s chief executive officer, in a statement.
Twelve of Grosvenor Fund Management’s 112 investment assets were in the US. The firm did not break out its US returns, but reported a 15 percent overall weighted return in 2014, up from 7.3 percent in 2013.
Meanwhile, Grosvenor Americas, the San Francisco-based US investment arm of Grosvenor Group, will continue operations and seek to raise and invest third-party capital through joint ventures and other non-fund structures. The group will maintain investments with external companies, including a $70 million industrial joint venture with Boston-based High Street Realty Company announced earlier this month.
“Real estate partnerships with third-party equity continue to be an important part of what Grosvenor does in each of its regions, and in the US this will continue through Grosvenor Americas,” Raynor said in a statement.