Schroders has agreed to acquire Algonquin, a pan-European hotels investment and management business with €1.8 billion in assets under management, a move that bolsters firm’s real estate business.
As part of the deal, Schroders will also acquire various co-investments alongside Algonquin’s existing clients, the firm said in a statement. Financial terms of the deal were not disclosed.
Commenting on the purchase, Duncan Owen, global head of real estate at Schroders, said that the acquisition complements Schroders Real Estate’s existing focus in sectors, including office, retail, logistics, self-storage and large multiple use sites.
“Algonquin’s track record will complement our strong investment performance with over 85 percent of our AUMs outperforming over the last one, three and five years,” he noted. “Their client base includes some of Europe’s largest financial institutions and the quality and experience of its employees are some of the principal reasons why Schroders is acquiring the business.”
Founded in 1998, Algonquin currently manages assets across Europe, comprising more than 7,500 hotel rooms, and has offices in Paris, London and Brussels. The firm’s current chief executive, Frederic de Brem, will be joining Schroders as head of its new hotels business, Schroders Real Estate Hotels.
On the appeal of the hotels sector, de Brem added: “We believe it is a large market supported by strong fundamentals of growing occupational demand and a sector offering strong income growth for investors.”
Schroders has also been expanding its real estate capital raising capabilities outside of Europe as of late. In February, the firm appointed Canon Yau as director of strategic partnerships for the Asian real estate team. Based in Hong Kong, Yau is responsible for sourcing Asian capital for UK and European strategies. Yau was previously with CBRE Capital Advisors as senior director focused on capital raising and cross-border investment.
A similar appointment was also made in North America around the same time when the firm appointed David Sullivan as head of strategic partnerships. Sullivan, who joined from CBRE Global Investors, is also tasked with sourcing US and Canadian capital.
Schroders’s private assets and alternatives business had £33 billion ($44.71 billion; €37.52 billion) in assets under management, as of December 31. Within this business, real estate takes up the biggest share with assets over £13 billion.