Italian real estate fund manager Fondi Immobiliari Italiani (Fimit) has signed a non-binding memorandum of understanding (MoU) about merging with First Atlantic Real Estate, the real estate fund management arm of Milan-listed private equity investment group Dea Capital.

Italian real estate fund manager Fondi Immobiliari Italiani (Fimit) has signed a non-binding memorandum of understanding (MoU) about merging with First Atlantic Real Estate, the real estate fund management arm of Milan-listed private equity investment group Dea Capital.

The companies undertook a joint study in April on the feasibility of integrating the two businesses. They have completed the due diligence process and inked a preliminary merger agreement in June. A merger will create Italy's largest real estate asset management group, with over EUR 8 bn of assets and 19 funds under management, five of which are listed.

The new entity would be owned by the shareholders of Fimit and Fare Holding, which is controlled by Dea Capital. Milan-listed Dea Capital is a private equity group majority-owned by DeAgostini Spa, a leading publishing group in Italy. In 2008, the company bought a 70% stake in First Atlantic Real Estate SGR, which manages a total of six funds, with assets under management of around EUR 3 bn.

The announcement follows the decision by Fimit to suspend its merger talks with Pirelli RE's asset management arm earlier this year. In January the two companies announced that the operation 'was not compatible in timing with the Pirelli RE real estate development plan already underway, and with the reorganisation process at Fimit'.