Global Wealth Management (GWM) Group and a Fortress Investment Group-managed company are aiming to buy a 40 percent stake in an Italian real estate fund for €120 million at a 40 percent discount to net asset value.
GWM, which is owned by Italian shareholders, said the “partial voluntary” tender offer had been made for the Rome-based real estate fund, UniCredit Immobiliare Uno, which was established in 1999 and which owns a real estate portfolio valued at around €475 million in June last year.
Its partner in the deal is Eurocastle Investment Limited, a European firm managed by Fortress Investment Limited which is listed on the NYSE Euronext Amsterdam stock exchange.
In an announcement, GWM said the offer price was equivalent to €1.850 representing a 13.1 percent premium to the market price for the last three months.
“The offerors believe that the fund is comprised of quality real estate assets and that the investment manager’s declared plans for managing the fund are consistent with unit holders realizing the full value of the fund’s investments within the term of the fund,” said GWM. “Furthermore, the offer would allow the offerors to make a significant investment into the fund by launching a single purchase offer with a reasonable time frame addressed to, without distinction and at the same terms and conditions, all the fund’s unit holders.”
The deal is significant as indicative of how international capital is looking to Italy as a place to invest in real estate for the first time this cycle. Moreover, it is thought to be the first tender offer since 2006 for a publicly-listed closed ended real estate fund in Italy. The opportunity has arisen because of an approaching expiry date of the fund, with experts suggesting more is to come in Italy as such funds mushroomed in size over recent years. The underlying investors are retail as opposed to institutional.
For its part, GWM has been notably stepping up its investments in real estate, and certainly in Italy. Last year it was an early mover when it acquired the Da Vinci Market Central near the Rome airport from international real estate developer AIG/Lincoln. The firm said the acquisition of the 602,000-square-foot park fell within its strategy to acquire prime and “well performing” assets in Italy and across Europe and “capitalize on the scarcity of investment capital available in the real estate sector.”
GWM already had made a splash in Italy having bought the Italian closed-ended fund Clarice, which owns a portfolio of 70 properties valued at around €220 million. The properties in that portfolio are scattered over Italy and let to Telecom Italia
In addition, two other European deals were publicized by the group in 2013. GWM took part in providing a £85.5 million (€100 million; $132 million) development loan to fund a London office development, Aldgate Tower. In January, the firm was reported to have a 10 percent stake in a sale-leaseback of 12 Spire Healthcare hospitals.