CBRE GI & ESPS merge UK funds into €1.7b vehicle

The fund will be authorised by the Financial Conduct Authority (FCA) and operate as a Property Authorised Investment Fund (PAIF).

'We are delighted that ESPS, as a highly valued separate account client, chose to continue their relationship with CBRE Global Investors,' commented Michael Ness, head of UK for CBRE Global Investors (pictured). 'The fund is well positioned to continue delivering out-performance for all our investors, with a first rate team and simplified structure.'

CBRE GI has been the investment manager of the ESPS direct UK property portfolio since 2006. According to a statement, Electricity Pension Trustee Limited (EPTL), the scheme trustee of ESPS, consulted investment advisors Aon Hewitt about the long term options for its UK property portfolio, before deciding to merge the portfolio with an existing core balanced fund, and selecting the CBRE UK Property Fund.

'This merger is indicative of a theme that CBRE Global Investors are seeing across a number of our domestic and global investors – an increasing desire for scale and simplicity,' Ness added.

'This is a very exciting time, the merger establishes the PAIF as one of the major players in the UK market,' said Hannah Marshall, fund manager of the newly-formed PAIF. 'The ESPS portfolio was complementary to the existing fund and had a good performance track record. Our investors will now be able to benefit from the PAIF structure which is more flexible and efficient. We are also able to offer overall lower fee charges and a larger diversified investor base. With the increased size of the fund, we now have the ability to further exploit economies of scale.

'With all these changes in place, we firmly believe that the fund is very competitive and will meet our existing investor requirements as well as be very attractive to new investors,' concluded Marshall.

Aon Hewitt, PWC, Eversheds and Mayer Brown acted for ESPS.

BLP and Nabarro acted for the CBRE UK Property Fund.