EUROPE NEWS:La Banque growth

French banks have taken a battering over the last two years but, in some cases, their asset management arms have not suffered. In fact, there are examples of some even expanding, with La Française Asset Management being a current example.

La Française, which is owned by Crédit Mutuel Nord Europe, has
$50 billion in assets under management and is looking to grow into a European powerhouse of real estate investment management. To do so, it announced a global strategic alliance with Forum Partners last year, taking a 24.9 percent stake in the firm and making a commitment to invest $600 million in various strategies together.

True to its word to use the alliance to grow, La Française announced the takeover of Cushman & Wakefield Investors last month. The deal added $1.2 billion to the French managers’ existing core and core-plus assets, taking it to $14 billion overall. When combined with the AUM of Forum, La Française is now part of a $20 billion platform – one of the largest in the region.

The acquisition of Cushman & Wakefield Investors isn’t just about AUM. According to Forum’s founder Russell Platt, it is about adding a team of eight investment professionals, led by chief executive officer David Rendell, to source fresh deals for La Française’s clients and Forum’s investors, both of which have shown greater interest in Europe in the last year. Indeed, Platt noted how investors in Asia are interested in the European market, starting with London but fanning out to Paris and elsewhere. Meanwhile, US institutions are showing “renewed interest” in major markets throughout the region.

Cushman & Wakefield Investors, meanwhile, already is a significant player in Europe. In fact, it underlined the strength of its investor base last April when it acquired 30 Crown Place in London’s financial center – the first overseas investment for Korea’s Samsung SRA Asset Management. The firm also manages a number of other separate accounts as well as a core-plus commingled fund, PURetail, which owns a diversified pool of urban European retail assets and for which it still is raising capital.

Platt said it was too early to talk about expanding into value-added and opportunistic investing, although Forum and its partnership with La Française already manage an equity fund within its mezzanine and preferred equity strategy. Meanwhile, plans are afoot for a senior debt strategy.

On taking over Cushman & Wakefield Investors, Platt noted that there has been more merger and acquisition activity in the private equity real estate arena in recent years, most notably in deals between such firms as TIAA-CREF and Henderson Global Investors, BlackRock and MGPA and Ares Management with AREA Property Partners. In this latest instance, the sale was driven by Cushman & Wakefield deciding that its real estate investment management unit was no longer a core business, he said, adding that the ultimate pairing was initiated by Forum’s London-based co-founder, Andrew Walker.

In terms of mergers and acquisitions as a growth strategy, Platt summed up: “We have taken a view that, in looking at any new strategy, we should be considering the build versus buy option. Given the ongoing consolidation in the real estate industry, however, sometimes it is best from the ‘speed-to-market’ point of view as well as core competencies and critical mass to consider acquiring a business rather than building one from scratch.”
 French banks have taken a battering over the last two years but, in some cases, their asset management arms have not suffered. In fact, there are examples of some even expanding, with La Française Asset Management being a current example.

La Française, which is owned by Crédit Mutuel Nord Europe, has
$50 billion in assets under management and is looking to grow into a European powerhouse of real estate investment management. To do so, it announced a global strategic alliance with Forum Partners last year, taking a 24.9 percent stake in the firm and making a commitment to invest $600 million in various strategies together.

True to its word to use the alliance to grow, La Française announced the takeover of Cushman & Wakefield Investors last month. The deal added $1.2 billion to the French managers’ existing core and core-plus assets, taking it to $14 billion overall. When combined with the AUM of Forum, La Française is now part of a $20 billion platform – one of the largest in the region.

The acquisition of Cushman & Wakefield Investors isn’t just about AUM. According to Forum’s founder Russell Platt, it is about adding a team of eight investment professionals, led by chief executive officer David Rendell, to source fresh deals for La Française’s clients and Forum’s investors, both of which have shown greater interest in Europe in the last year. Indeed, Platt noted how investors in Asia are interested in the European market, starting with London but fanning out to Paris and elsewhere. Meanwhile, US institutions are showing “renewed interest” in major markets throughout the region.

Cushman & Wakefield Investors, meanwhile, already is a significant player in Europe. In fact, it underlined the strength of its investor base last April when it acquired 30 Crown Place in London’s financial center – the first overseas investment for Korea’s Samsung SRA Asset Management. The firm also manages a number of other separate accounts as well as a core-plus commingled fund, PURetail, which owns a diversified pool of urban European retail assets and for which it still is raising capital.

Platt said it was too early to talk about expanding into value-added and opportunistic investing, although Forum and its partnership with La Française already manage an equity fund within its mezzanine and preferred equity strategy. Meanwhile, plans are afoot for a senior debt strategy.

On taking over Cushman & Wakefield Investors, Platt noted that there has been more merger and acquisition activity in the private equity real estate arena in recent years, most notably in deals between such firms as TIAA-CREF and Henderson Global Investors, BlackRock and MGPA and Ares Management with AREA Property Partners. In this latest instance, the sale was driven by Cushman & Wakefield deciding that its real estate investment management unit was no longer a core business, he said, adding that the ultimate pairing was initiated by Forum’s London-based co-founder, Andrew Walker.

In terms of mergers and acquisitions as a growth strategy, Platt summed up: “We have taken a view that, in looking at any new strategy, we should be considering the build versus buy option. Given the ongoing consolidation in the real estate industry, however, sometimes it is best from the ‘speed-to-market’ point of view as well as core competencies and critical mass to consider acquiring a business rather than building one from scratch.”