M&G Real Estate today announces that it has acquired a 65% stake in BauMont Real Estate Capital Limited (BauMont), a leading European manager of value-add real estate investment in Western Europe.
Founded in 2017, BauMont has a team of 18 people led from Paris and London, with €1.5 billion in assets under management and a management team with a track record of over 20 years in European value-add real estate. The acquisition is part of M&G's strategy to selectively include and expand investment capabilities in areas where active management can provide alpha for clients over medium to long term investment horizons.
BauMont will join forces with M&G's €40 billion global real estate business, enabling M&G to broaden its client proposition beyond its core strategies in residential, commercial and debt real estate, investing at different stages of the property cycle and extending the potential for returns through active management. In turn, BauMont will benefit from M&G's strong pan-European real estate platform and global distribution capabilities, which have recently expanded to meet the evolving needs of institutional investors in Europe and Asia.
Meanwhile, the With-Profits Fund of M&G's insurance business, which invests in and manages the long-term savings of 4.6 million UK policyholders, will invest €200 million in BauMont's latest fund, adding higher-return value-add opportunities in the UK and France to its £13 billion property allocation. Investment intention surveys have already shown that European and Asian investors see the market potential for value-add real estate strategies, especially at this point in the cycle. As urbanisation and economic growth continue to drive demand for high-quality assets, value-add is set to play a crucial role in institutional investors' global real estate allocations. M&G Real Estate was advised by CBRE Investment Banking.
Tony Brown, Global Head of M&G Real Estate, said: "This new partnership is an opportunity to broaden the real estate strategies we offer our clients at a time when real estate is back on the radar of global institutional clients who value increasing their allocations at this stage of the cycle. In our long history of real estate investment, we have always continued to strive for excellence and are now able to offer our clients an attractive proposition at various stages of the real estate cycle and across the capital structure. We look forward to a long and successful partnership with BauMont".
Robert Balick, Managing Partner of BauMont, added: "European real estate markets are adapting to the higher rate environment and are entering a new phase of growth where demand is focused on a limited supply of high quality assets. Value-add strategies can take advantage of the rebalancing of entry prices, while actively repositioning assets to meet the needs of the new occupier profile. We are delighted that M&G will become a majority shareholder in our business and look forward to unlocking the growth opportunities that this strategic partnership can generate to deliver greater value to our investors".
M&G's €86 billion private markets business has six centres of excellence. These include real estate investment, of which M&G Real Estate is the 11th largest manager globally outside the US, with nine offices in Europe and four in Asia-Pacific. With over €40 billion in assets under management, spanning equity and debt real estate strategies, M&G Real Estate's platform offers a global view of the market and a wide range of attractive strategies to its clients. M&G Real Estate was advised by CBRE Investment Banking.
M&G Real Estate acquires a majority stake in BauMont
