Old Mutual Global Investors and Henderson Global Investors are merging two UK real estate funds.

Old Mutual’s $437m Property Fund – managed by CBRE Gloval Investors – will be merged with the £2.3bn Henderson UK Property OEIC. TIAA Henderson Real Estate will manage the combined fund.

The merger, which is due to complete early next year, subject to client and regulatory approval, will create a £2.7bn portfolio of assets and take TH Real Estate’s UK assets under management to around £9bn.

The managers jointly said that the Old Mutual fund, launched in December 2005, had met its objectives of providing both capital growth and income.

The portfolio will increase in size from 84 to 108 assets, with 577 tenants.

Ainslie McLennan, co-fund manager, said clients in both funds would benefit from a larger and more diversified property portfolio, including a broader tenant mix.

“Our investment process will remain unchanged,” McLennan said.

TH Real Estate recently appointed Andrew Friend as fund director, Rob McQueen as senior portfolio manager and Manreet Randhawa as fund analyst.