GLOBAL - Investors in fund manager F&C have backed a deal with property firm REIT that will give the UK-focused fund manager exposure to continental Europe and the nascent Indian market.

Spokesman Jason Hollands said a new £8.5bn (€10.7bn) entity, known as F&C REIT, would be "Invista-sized". Invista, the UK's largest listed property fund manager, has assets under management of €10.3bn distributed across 22 managed funds.

"It's transformational for both property businesses," he said. "It's a major sign of commitment to property in a tough environment. It isn't a short-term call on the market; it's a strategic move."

New CEO Nick Criticos managed the merger deal over several years for F&C after a private introduction.

"REIT wasn't up for sale. We spent a year looking for the right opportunity. This has good chemistry," said Hollands.

F&C will own 70% of F&C REIT while REIT founders Leo Noé and Ivor Smith, already substantial shareholders under the deal, will be able to increase their share of the partnership.

"They're incentivised to deliver on targets," said Hollands, pointing out the deal included property expertise as well as assets.

F&C claims the partnership will be earnings-enhancing within its first year.

"It isn't driven by cost take-outs. It's also a financially attractive deal," continued Hollands.

The fund manager has the backing of its major shareholders for the deal - including Friends Provident, which has said it intends to sell its shareholding in the firm.

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