Bentall Kennedy is merging with smaller peer GreenOak Real Estate to create a $47bn (€41.23bn) global real estate investment platform.
Sun Life Financial said its $36bn North American property management business will merge with the $11bn global real estate investment firm GreenOak to become Bentall GreenOak.
Sun Life, through its alternative asset management arm Sun Life Investment Management, is paying GreenOak shareholders $146m in exchange for a 56% stake in Bentall GreenOak.
GreenOak co-founders, John Carrafiell and Sonny Kalsi, existing GreenOak senior management and GreenOak’s strategic partner Tetragon Financial Group will own the remaining stake in the newly combined business.
As part of the deal, which is expected to close in the first half of next year, Sun Life said it will have an option to buy the remaining interest in Bentall GreenOak in 2026.
Bentall GreenOak will be led globally by Gary Whitelaw, as CEO, and Kalsi, as president. Carrafiell will be senior managing partner of the Bentall GreenOak UK/European business.
Dean Connor, the president and CEO, Sun Life Financial, said: “This transaction is right on strategy, broadening our asset management pillar by expanding the capabilities of our alternatives manager, Sun Life Investment Management.
“Combining the strengths of two leading and globally respected real estate investment managers will bring clients a broader range of investment solutions that include core, core plus and value add real estate, plus senior and tactical real estate debt strategies across North America, Europe and Asia.”
Steve Peacher, the president of Sun Life Investment Management, said: “Combining Bentall Kennedy with GreenOak extends our capabilities in real estate investment solutions, in a complementary way and increases Sun Life Investment Management’s total assets under management to $75bn.”
The combined business will provide its clients with real estate investment strategies including core, core plus and value add/opportunistic equity, as well as senior and tactical real estate debt strategies, Peacher said.
Whitelaw, said: “GreenOak and Bentall Kennedy are two highly complementary firms with virtually no overlap in investment strategies or offices.
“As members of the combined leadership team have worked together before, and given our extensive discussions over many months, we believe we share very similar investment practices, underwriting discipline, and client-centric cultures.”
Carrafiell and Kalsi, said: “The mission critical element in any combination is ensuring that the leadership team and the teams directly managing the investment programs and assets on the ground are able to remain focused on creating value and managing risk.
“This combination of like-minded and compatible firms uniquely allows us to do that – with our clients and fund investors working with the same local specialists with whom they have been working for many years.”