EUROPE- Grosvenor is planning to concentrate on developing its fund management business in continental Europe.
Among a set of priorities outlined in its recent Group Board meeting was the need to reshape Grosvenor's business in Continental Europe, which has developed faster and better than expected since it was founded in 1996 and has outgrown its present management structure.
A new management structure is set to be introduced in February 2009 and will focus on Grosvenor's joint control holding in Sonae Sierra, the European shopping centre developer and manager, and the fund management business in Continental Europe.
Mark Preston, group chief executive of Grosvenor Group, claimed: "Our new structure in Continental Europe will build on our achievements over the last 11 years, enabling clear focus in the future on our thriving fund management business and our very profitable proprietary investment in Sonae Sierra."
Neil Jones, chief executive of Grosvenor Continental Europe, added: "We see fund management as the best way to optimise our property skills and secondly, as a private company, it is a way to leverage our balance sheet. It allows us to diversify our capital base, both geographically and by sector."
According to Jones, Grosvenor will be "moving the management line internally" and capital will now become "the responsibility of the Group." Jones believes the strong growth of the European business is down to the resilience and growth in values of the retail sector, which accounts for more than 80% of Grosvenor's investments there.
Commenting on the impact the economic downturn has had on Grosvenor's business in Continental Europe, Jones said: "The financial crisis affects everyone in one way or another. In general, Grosvenor is a very conservatively-geared organisation in terms of its financial leverage. We also went through a relatively aggressive selling programme in 2006, 2007 and indeed 2008 and we are in a position where we are sitting on liquidity."
"We think there will be opportunities in the due course and it is just a matter of timing our re-entry into the market," he added.
James Raynor has been appointed managing director for Grosvenor Fund Management in Continental Europe and will take up his position from 2 February 2009.
This follows Jones' decision to leave the company next summer as part of changes announced by Preston to restructure the business.
Jones will remain as a consultant to the Group to offer advice on its property investments.
Other priorities Preston outlined are the need to create value through Grosvenor's own capital and make sure all capital is used at the right time in the right place. Preston also called for Grosvenor to reinforce its brand positioning and sustain a core portfolio in the London Estate.