Barings has relinquished part of its German real estate business, with managing director and Pamera co-founder Christoph Wittkop leaving to set up a new company.
Sonar Real Estate, which will begin operations in December, is expected to take over a number of “non-core” third-party asset management and advisory mandates for German investors.
Barings, which manages real estate investments on behalf of its parent MassMutual insurance company and third-party investors, said it was repositioning its German business and aligning it “with the rest of its real estate operations across Europe”.
The real estate arm of Barings, formerly known as Cornerstone Real Estate Advisors, expanded its presence in Germany in 2014 when it bought Pamera Asset Management.
The acquisition gave the US-headquartered fund manager five offices and 38 staff in Germany, along with €1bn in real estate assets under management.
Wittkop, who established Pamera with Gunther Deutsch, will become chairman of the management board of Sonar Real Estate, which is expected to take over the management of €1.2bn of assets, including existing club deals and separate accounts with German institutional investors.
Deutsch will remain at Barings as managing director and head of investment transactions for Europe.
Sascha Becker, currently managing director and head of Frankfurt, will become Barings Germany country head, reporting to Deutsch and Charles Weeks, head of real estate equity for Europe and Asia-Pacific.
Barings plans to expand its German business with a focus on investment management and said it had €3bn of “capacity” to invest in Europe, of which one third was earmarked for Germany.
“Barings will now manage circa €1bn on behalf of four discretionary investment management clients, comprising 18 assets, across Germany,” said Becker. “With a further €150m in exclusivity and an additional €1bn to deploy.”
Mike Freno, president of Barings, said: “It was always our intention to grow our investment management business. We have now reached that critical point and are splitting the business, so Barings can focus solely on our investment management clients.”
Sonar Real Estate, meanwhile, is to target “German and foreign investors seeking an entrepreneurial local partner in Germany and, if required, a co-investor, with a primary focus on value-add and opportunistic investments”.
It will begin by taking over existing club deals and separate accounts, including mandates awarded to Barings via German investment platform Institutional Investment Partners (2IP).
A number of other Barings staff are joining Wittkop in setting up Sonar Real Estate, including: head of German institutional investors and fund management Matthias Gerloff; head of the Eastern region and head of asset management Nick Puschkasch; and head of development and project management Daniel Jäde.
Sonar Real Estate will begin operations with offices in Hamburg, Berlin and Dusseldorf, and 17 employees, and it plans to open an office in Frankfurt, which will be managed by an additional managing partner from January next year.
“We know what makes the market tick and how to manage, with success, challenges that are off the beaten track,” said Wittkop.
“For this reason, and in view of our impressive track record in recent years, we are firmly convinced that Sonar Real Estate will quickly become established as a competent partner for domestic and international investors in Germany.”
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