Macquarie bolsters real estate investing arm with GLL buy

The acquisition gives Macquarie a ‘very solid base of core and core-plus’ in Europe and the Americas, with potential to expand into other geographies and risk strategies.

Macquarie Group has more than doubled the size of its real estate investment platform with the purchase of GLL Real Estate Partners, the groups said last week.

GLL will become the real estate equity platform for Macquarie Infrastructure and Real Assets in Europe and the Americas and will continue to operate under its own brand. MIRA, which managed about €3.6 billion in real estate out of its €94 billion portfolio as of September 30, will oversee €10.6 billion in the asset class once the acquisition of the Munich-based fund manager is complete.

The firm has long considered adding to its real estate investment business, MIRA real estate head Matthew Banks told PERE. MIRA currently has property holdings in Mexico, China and Europe, and will continue to manage those assets separately from the GLL platform.

Macquarie is seeking to build a real estate counterpart to its massive infrastructure business, which currently accounts for the vast majority of its overall portfolio. “We decided some years ago that obviously we wanted to grow a complementary platform alongside infrastructure,” Banks said. “There were a number of ways of doing that, including organically, which we’ve been doing, but the reality is if we were going to get there in a reasonable amount of time, we needed to acquire a platform.”

Some of the companies MIRA evaluated were too big or too small, but Banks said GLL was the right size – €7 billion in assets under management and a staff of more than 130 – as well as a good cultural fit and a global footprint, with 100 diversified assets that are currently 44 percent allocated to Europe, 41 percent to the US and 5 percent to South Korea. Banks highlighted that GLL’s focus on core and core-plus investing also mirrors MIRA’s risk/return profile for its infrastructure strategy.

“That’s not to say we won’t do value-added or opportunistic real estate. We can build on a very solid base of core and core-plus,” he said. “In time, what Macquarie can do is offer a broader spectrum in terms of capital that we can introduce to GLL. And in reverse, investors are going to look for broader and deeper real assets opportunities, so offering GLL clients a more holistic package of product offerings is important.”

Banks has not ruled out further company-level acquisitions to continue expanding MIRA’s real estate business.

“We certainly want to grow for the benefit of our investors and shareholders. We may look at platform opportunities in Asia in the future – but there’s nothing particular on the table,” he said. “We’re mindful of anything that would help us expand.”

The GLL acquisition is expected to close in the second quarter. GLL’s entire team, led by founding partners Rainer Göebel and Gerd Kremer, plans to stay under the new ownership.