MGPA for sale

Prospective bidders already have conducted due diligence on the Asia- and Europe-focused private equity real estate firm and a deal could happen in the next quarter.

MGPA, the Asia- and Europe-focused private equity real estate firm, is being marketed for sale.

PERE can reveal the firm, which currently manages approximately $11 billion of real estate across the two regions, appointed advisors, including a boutique investment bank and a law firm, at the turn of the year to conduct a sale process.

It is understood that several parties, including large insurance companies and asset management companies, have undertaken due diligence already and that a deal could be struck as soon as the next quarter.

MGPA is 56 percent owned by Macquarie Group, the Australian bank, and the remainder is owned by the firm’s management, led by Singapore-based executive chairman James Quille and chief executive officer Simon Treacy. The division within Macquarie Group that holds its stake in MGPA is Macquarie Infrastructure and Real Assets (MIRA), part of Macquarie Funds Group, which is led by Shemara Wikramanayake and holds $A337 billion (€271 billion; $350 billion) in assets under management.

A sale would mark a significant next chapter for the firm, which was started as Macquarie Global Property Advisors in July 2004 by Quille and colleagues at Lend Lease and Macquarie Property, a former division of Macquarie Group.

According to PERE Connect, MGPA has since gone on to raise 11 private equity real estate funds comprising approximately $8.6 billion of equity and has grown to about 240 staff. The funds include MGPA Asia Fund III, Asia’s largest-ever fund which was established in 2007 and attracted $3.9 billion of capital from the some of the world’s largest institutional investors, including the Canada Pension Plan Investment Board, the New York State Teachers’ Retirement System and the Abu Dhabi Investment Authority.

Having benefited from an extension for its investment period from investors, the firm has been acquisitive for that fund over the past months, buying a Shanghai office for RMB263.5 million (€32.4 million; $42 million) as recently as earlier this month. The vehicle has approximately $240 million of dry powder left, and MGPA is thought to be preparing for the launch of a fourth Asia vehicle.

It is unclear at this stage how much a buyer would need to pay for MGPA, although a significant part of its valuation would come from its current and future ability to raise and deploy capital.

In addition to the remaining resources in Asia Fund III, MGPA also raised $100 million for its fourth Europe-focused opportunity fund in November 2011 and €85 million for its Asien Spezialfonds, a special purpose fund for German investors to make investments in Asia in September last year. The firm also has raised capital via various separate accounts and has a sub-advisory contract with Orlando-based REIT manager CNL Financial Groups, through which it invests retail capital.

MGPA and Macquarie Group declined to comment.