Patrizia Immobilien has acquired Danish multi-manager Sparinvest Property Investors (SPI) in a move aimed at broadening its current European-wide reach to the global stage.
Copenhagen-based SPI, which specializes in fund of funds management, has around €1 billion of assets under management and also manages four active real estate funds with equity commitments totaling €1.5 billion. The firm is widely-regarded as a small- and mid-cap operator in the fund of funds field.
SPI was founded in 2005 by its managing partners in cooperation with Sparinvest, the Danish financial institution, and has a history of working with a global network of best-in-class operating partners and invests funds across Europe, Asia and the Americas.
“This acquisition is a further demonstration of our ambition to expand through inorganic growth,” he said. “SPI, with its strong track record and complementary global setup, is a perfect fit for Patrizia, enabling our investors to tap into a new product line and new markets.”
Patrizia, based in Augsburg, Germany, has made no secret of its global ambitions. In a rare interview with PERE in April, chief executive Wolfgang Egger (pictured) spoke about his aim of turning the company he founded as a teenager into an international powerhouse.
This goal has been clearly demonstrated through the expansion of the firm’s book, which grew from €2.7 billion to €18.6 billion between 2011 and 2016.
The capture of SPI, Egger said, was a “perfect fit” for Patrizia. “This acquisition is a further demonstration of our ambition to expand through inorganic growth,” he said. “SPI, with its strong track record and complementary global setup, is a perfect fit for Patrizia, enabling our investors to tap into a new product line and new markets.”
SPI will become a member of the Patrizia Group, and as a fully-owned subsidiary of the group, it will retain full autonomy with regard to investment decisions concerning its funds, a spokesman explained. It is understood that SPI’s fund of funds products will also be added to Patrizia’s product line.
“With our pan-European network and our more than 200 institutional investors, we can unlock further growth potential within SPI’s products,” added Egger.
Patrizia itself has a strong track record of successful mergers and acquisitions, most notably the 2010 acquisition of LB Immo Invest, which at the time was one of Germany’s largest providers of institutional real estate funds.
Two years later, it also bought Tamar Capital Group, a London-based real estate investment manager, with assets across continental Europe.
Sparinvest’s most recent vehicle, Sparinvest Property Fund IV, held a final close in May last year after collecting €505 million from a range of Scandinavian institutional investors. The firm said it was aiming at generating a net internal rate of return of around 11 percent through the vehicle.
Investments for the fund so far include partnerships with operators for workforce housing properties in Denver; light industrial assets in Las Vegas and residential real estate in Mumbai and Dublin.
In April, Patrizia’s market capitalization was €1.45 billion, but following Thursday’s SparInvest announcement, the figure now stands at €1.7 billion.