Fondiaria-Sai to spin off EUR 323m of assets to new fund

Italian insurance group Fondiaria-Sai and its unit Milano Assicurazioni have approved a plan to spin off EUR 323 mln of real estate into a new closed-end fund. The Fondo Rho investment vehicle will have a life of 10 years and will be managed by Italian fund manager Fimit.

Fondiaria-Sai said it will transfer 15 buildings to the fund, with a total value of EUR 323 mln. They comprise 11 properties owned by Fondiaria-Sai, three assets controlled by Milano Assicurazioni and one held through the Tikal RE Fund. The insurance group will retain a 30% stake in the fund, it said, with a commitment to retain its interest for the next four years. The remaining 70% of the fund's units will be sold to institutional investors.

Fondiaria-Sai said that the operation, to be completed by the end of November, is the last phase of a process launched in 2008 aimed at extracting value from its real estate. The financial institution is booking a gross gain of EUR 118 mln through the transaction.