Talks between Standard Life and Ignis Asset Management could lead to the latest in a series of mergers and takeovers to have implications for real estate fund management.
The acquisition of Ignis by the Scotland-based insurance group is still uncertain and talks are likely to take several months. Ignis, part of the Phoenix Group, has stressed that talks are ongoing and, while being at an advanced stage, may not lead to a deal being done.
Real estate represents less than 5% of the Ignis book, but a deal would give Standard Life greater exposure to UK property and boosts its property assets under management by more than a quarter. It remains to be seen how Standard Life Investments, which itself manages several UK property funds and mandates, would integrate the Ignis property business.
Standard Life Investments manages more than £10.3bn in real estate assets and has built a global platform with offices in Paris, Boston, Toronto and Hong Kong. As well as around 500 direct real estate holdings, the company has also built a portfolio of listed real estate securities.
Ignis has around £67bn (€80bn) of assets under management. Its property division, Ignis Real Estate, is a pure UK player that manages £2.9bn of assets, the majority of which are held in two funds. Around £1.2bn and £1.05bn is respectively held in the open-ended Ignis UK Property Fund and the closed-ended UK Commercial Property Trust vehicles.
Ignis is working on a new UK vehicle for pension funds, planned for later this year. A spokesperson said the vehicle would still go ahead.
Consolidation in the UK’s asset management industry has had potential to shake up the real estate sector in recent months.
Aberdeen Asset Management’s takeover of Scottish Widows Investment Partnership is progressing. The move was last week granted regulatory approval by the UK’s Financial Conduct Authority, with completion due next week, almost five months after first being announced.
Earlier this year, Bank of Montreal made a move to take over UK manager F&C, which owns real estate fund manager F&C REIT, in a £700m deal.
TIAA-CREF and Henderson Global Investors joined forces in June last year, to create TIAA Henderson Real Estate with $63bn (€48.2bn) in assets under management. The joint venture is owned 60% by TIAA-CREF and 40% by Henderson.