Legal & General launches direct US real estate equity business

Legal & General is moving its direct real estate investment business into the US for the first time and has hired Alexia Gottschalch and Tim Watson from Aegon Asset Management to lead the expansion.

Legal & General Investment Management Real Assets (LGIM RA) already has a presence in the US private debt markets, but today’s move sees the firm expand its direct real estate equity investment capabilities beyond the UK.

The company, which has invested in UK real estate for several decades and today manages £24.1bn (€27.2bn) of property assets, said the US was “significantly larger and more liquid” than its domestic market.

It hopes to export its UK track record in urban regeneration, build-to-rent residential and long-lease property.

“The launch of our equity capabilities in the US represents a huge opportunity to mirror our success in the UK, investing in the real economy to improve lives and deliver positive social outcomes,” said Bill Hughes, global head of real assets.

The new real estate business has been launched in response to investor demand for real estate equity exposure from Legal & General Retirement America, including from its US pension-risk-transfer business and third-party clients.

Gottschalch, who was managing director, global head of client strategy, real assets and US head of equity real assets Aegon, has been appointed to the new position of head of US real estate equity within LGIM America.

Based in Chicago, she will be responsible for building the platform and incorporating acquisitions, asset management, operations, financial planning, marketing, product development and strategic initiatives.

Gottschalch will report to both Hughes and Aaron Meder, CEO of LGIM America.

Watson, who was a portfolio manager at Aegon, has been made head of investment and portfolio management for US real estate equity. Also based in Chicago, he will be responsible for developing investment programmes, identifying investment opportunities and overseeing investment and portfolio performance.

Meder said: “Alexia and Tim will be invaluable as we launch our real estate equity platform to the US market. In the US, renewables, commercial property and build-to-rent are asset classes which have existing large market opportunities and where we believe our clients can benefit from our new leadership team’s investment expertise and insights.”

Gottschalch said: “I’m very excited to be joining LGIM Real Assets at such a pivotal time in the business’ US expansion journey and to launch the real estate equity platform.

“The team and I are keen to build upon LGIM RA’s proven track record, looking to provide excellent investment solutions and services to institutional investors across the US.”