Grosvenor Fund Management (GFM), the real estate investment management business of London-based property company Grosvenor, is to be rebranded as Grosvenor Europe, the firm has announced.
Grosvenor said in its annual review that the rebranding of GFM would take place in July, and the platform would become the firm’s “fourth proprietary operating company” in the process.
The rebranding of the £3.5 billion (€4.4 billion; $5 billion) platform is the latest chapter in Grosvenor’s efforts to reposition it as a Europe-focused business and one which operates similarly to its Grosvenor Britain and Ireland, Grosvenor Americas and Grosvenor Asia Pacific businesses. Each of those businesses operates both directly and alongside third-party capital, but with less emphasis on traditionally structured private real estate funds.
In the review, Grosvenor said: “With effect from 1, July 2016, Grosvenor Fund Management will be renamed Grosvenor Europe and become the fourth proprietary operating company. It too will invest its own capital, mostly alongside partners, and will be measured by its return on capital, and will have a European and largely retail focus. Managing funds for co-investment partners will remain a very important part of the activity of the business.”
Last year, Grosvenor Fund Management shuttered its US and Asia platforms in a bid to focus its efforts on its better performing European business which has had successes in retail-led strategies in selected European cities.
In the annual review, Grosvenor said also that its indirect business, which invests from its balance sheet into products managed by external investment managers, was its best performing business in 2015, returning 10 percent, up from 7 percent in 2014.
Standout investments made by that platform in the year included its first investment in Sub-Saharan Africa, a £30 million commitment to the second fund raised by investment manager RMB Westport. Grosvenor’s indirect business now has invested £573 million of equity.
Grosvenor said its total return for the year was 9 percent, slightly ahead of its prediction and in line with its long term average. The return came from a revenue profit of £83.3 million.
However, it expected lower returns and revenue profits in the medium term. In the review, the firm said: “While we have seen performance above the cycle average in each of the years since the financial crisis, we anticipate the next few years will bring a more challenging environment, particularly when interest rates start to rise.”