UNITED STATES - Brookfield Asset Management has moved into the REIT management business with the acquisition of KG Redding.
Clifford Lai, managing partner at Brookfield, confirmed the transaction included $80m (€54.8m) in cash, class A limited voting shares in Brookfield along with potential contingent considerations based upon the future performance of the company.
"We had been searching for the past 12 months for a REIT manager that we could do a transaction with and we think that KG Redding is a good fit for our company. We have been working on this deal, in particular, for the past four to five months."
Brookfield believes the new development gives the company the space to offer a full service real estate operation to pension fund clients.
"We can now work with clients on both public and private real estate relationships," said Lai.
"In the past, there were some investors that went to other managers when it was looking for a REIT manager. We don't expect to lose this business anymore," he added.
Under the terms of the deal, KG Redding - which has $6bn in assets under management - will continue to operate as an independently-run registered investment adviser under the name of Brookfield Redding LLC, led by key executives Kim Redding, Nicholas Tannura and Jason Baine.
KD Redding currently provides real estate services to a variety of institutional investors, includes pension funds, on a separate account basis, but will now have the capacity to invest in REITS on a global basis through AMP Capital Redding Investors, which has regional offices in Chicago, London, Singapore and Sydney.
Until now, Brookfield has been known mainly as a player in the ownership of office assets, most notably for its $35bn worth of property assets under management in New York, Boston, Washington DC, Los Angeles, London, Brazil and Australia.
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