GLOBAL - Protego Real Estate Investors has been bought by Cornerstone Real Estate Advisers, a wholly-owned subsidiary of the Massachusetts Mutual Life Insurance Company (MassMutual).
The UK-based real estate investment management company had expanded into continental Europe since being founded in 2004 and today has approximately $2.5bn (€1.67bn) of assets managed and services in the UK, Sweden, Finland and Germany.
The move marks the first move into Europe for Cornerstone which has only been in active in the US since it was established in 1994.
Cornerstone has been primarily active in core and value-added non-listed real estate markets investment (as well as public real estate securities markets), investing across sectors, including residential, office, hotel, retail and industrial.
The acquisition provides Cornerstone with a European platform to its existing European institutional client base, enabling US institutional capital to invest in Europe, and vice versa.
In conjunction with the Protego acquisition, Cornerstone will integrate the Real Estate Finance Group of Babson Capital Management (another subsidiary of MassMutual) into Cornerstone and the newly-expanded Cornerstone will become a subsidiary of Babson Capital Management.
However, the Protego brand will be maintained in Europe.
Cornerstone and Protego said this move will complement their existing operations in the US and Europe and will enable the new entity to offer full investments in direct real estate, listed securities and debt markets.
The combined organisation will become one of the largest real estate managers in the world, managing close to $30bn of real estate assets globally.
"Everyone at Cornerstone places the highest priority upon providing the best quality of service to our clients and investors, and I know the same is true of Protego," said David J. Reilly, president and chief executive at Cornerstone.
"The forging of this new entity will better position Cornerstone and Protego to continue to achieve in an even more comprehensive manner, and to satisfy the increasing needs of our clients to provide a wide array of investment options, whether they be in debt, equity or REIT securities.
Iain Reid, chief executive and co-founder of Protego, said: "Having now established a successful, stable and profitable European fund management operation, this acquisition by Cornerstone represents the next stage in the evolution of our business plan.
"The timing of this transaction is ideal from all parties' perspective as we plan a conduit for two-way transatlantic capital flows between the US and Europe. We have had a number of approaches from US and continental European, as well as domestic UK, fund management operations wishing to acquire the Protego business since it was established in 2004," said Reid.
He continued: "We have been speaking with Cornerstone for nearly 18 months and it is clear from our discussions that the two businesses are complementary both in their investment philosophy, business structure and strategy as well as cultural ethos."
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