Kennedy Wilson enters Europe in €1.6bn Bank of Ireland buy

Entree to Europe for Kennedy Wilson as the California-based firm takes over the property investment management book of troubled Bank of Ireland. The deal means the value of Kennedy Wilson’s global real estate assets under management will grow to almost $10 billion.

Kennedy Wilson, a Los Angeles-based real estate investment and services firm, has taken over the €1.6 billion ($2.3 billion) property investment management business of Bank of Ireland.

The deal, announced just 24 hours after shares in the troubled Irish bank sunk to an all time low of just 14 cents, marks Kennedy Wilson’s entry to the European market.

Under the terms of the transaction, the US firm has taken over Bank of Ireland Real Estate Management (BoI REM) and its senior team, for an undisclosed sum. The platform, with offices in Dublin and London, has been renamed Kennedy Wilson Europe and will continue to be led by BoI REM’s managing director Peter Collins.

William McMorrow, chairman and chief executive officer of Kennedy Wilson, said the transaction formed a “base” to develop its asset management business throughout Europe, helping to build on its existing operations in North America and Japan. He explained: “Kennedy Wilson has identified opportunities for growth throughout Europe including an initial focus on Ireland.”

The deal means Kennedy Wilson will grow from $7.4 billion of assets under management in the US and Japan to almost $10 billion of assets in the US, Japan and Europe.

Bank of Ireland has not been nationalised by the Irish government, but it is under heavy pressure to meet new capital requirements. It has to raise €5.2 billion before the end of July under Irish government plans to stabilise the country following its financial crisis. Yesterday’s 20 percent share price plunge was caused by the bank’s announcement of a buy-back of subordinated debt, offering bondholders just a fraction back of their initial investment.

Kennedy Wilson was established in 1977 in Santa Monica as a real estate auction company has spent most of existence as a private company before listing on the New York stock exchange last year. Other notable milestones for the firm came in 1998 when it attracted a $126 million investment by Colony Capital for its US and Japan businesses, and in 2000 when it launched a multifamily value-added investment fund programme. In 2002, it took its Japan business public on the Tokyo stock exchange and just last year, the company finally listed on the New York stock exchange.