The financial services provider and the European investment management firm have formed TIAA Henderson Global Real Estate, which will offer expanded investment opportunities in the global real estate market while helping to accelerate the growth of each firm’s real estate business.
TIAA Henderson Global Real Estate will consist of TIAA-CREF’s European real estate business, Henderson’s European and Asia Pacific-based real estate businesses, and a new global distribution and client service organization. The new company will provide access to global capabilities in the office, retail, logistics, multifamily and commercial real estate debt sectors.
TIAA-CREF is acquiring 100% of Henderson’s U.S. real estate business but will continue to manage its own North American real estate business and also provide investment management services for the new company. The combined total real estate assets under management (AUM) for TIAA-CREF and the venture is $63 billion.
A joint board of directors will oversee an experienced management team, combining the expertise from both TIAA-CREF and Henderson. TIAA-CREF will hold a 60% interest and Henderson a 40% interest in TIAA Henderson Global Real Estate.
TIAA-CREF and Henderson have agreed to look into other strategic opportunities beyond the real estate sector. Select Henderson mutual funds are currently available through TIAA-CREF’s institutional retirement and retail brokerage platforms. The companies will also explore ways to further capitalize on other product and service capabilities that each party may offer.
Upon the closing of the deal, Tom Garbutt, head of TIAA-CREF global real estate, will become chairman of the new company. James Darkins, managing director, property at Henderson, will become the CEO. The company will be headquartered in London, with offices in Europe, Asia Pacific and North America.
"We believe there are compelling growth opportunities in global real estate," said Garbutt. "This new venture will leverage TIAA-CREF's financial strength and long-standing real estate investment capabilities together with Henderson's expertise and wide array of real estate investments in Europe and Asia Pacific."
"Between us, we have the scale and capital resources to serve the real estate investing needs of our existing clients, as well as create exciting new opportunities to co-invest alongside them around the globe," said Darkins.
Pending regulatory approvals and customary conditions, the deal is expected to close in the first quarter of 2014.
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