Savills’ investment management business, Savills IM has agreed to exercise a call option to acquire the remaining 75% stake it did not already own in DRC Capital (DRC), a European real estate debt manager.
The acquisition is expected to complete by the end of this month.
DRC was founded in 2012 by Dale Lattanzio, Rob Clayton and Cyrus Korat, and is a major European real estate debt investment manager. It has arranged over £4.8 bn of debt investments since inception and currently has assets under management of £2.9 bn across a range of senior debt, high yield and whole loan products.
Savills IM acquired an initial 25% member interest in DRC in September 2018, at which time it was also granted an option to acquire the outstanding 75% of member interests in 2021. The company is paying an initial £31.3 mln in cash upon the completion of the acquisition and may pay up to £33.7 mln more in 2024 depending on the financial performance of the business over the three year period to 31 December 2023.
Dale Lattanzio, who has been a member of the Savills IM's senior management committee since 2018, will continue to lead DRC, with ongoing support from Rob Clayton and Cyrus Korat and the other members of the DRC senior management team. DRC Capital will operate under the "DRC Savills Investment Management" brand and will retain investment autonomy.
Commenting on the transaction, Alex Jeffrey, CEO of Savills Investment management said: ‘DRC continues to innovate in the real estate debt market and has rapidly built an enviable position in an increasingly competitive environment. We are very happy with the progress of the partnership since 2018 - the combination of Savills IM's and DRC's investment teams provides a compelling offering to our clients by providing investment opportunities across the entire real estate capital structure.’
Dale Lattanzio, CEO and Managing Partner, DRC Capital, commented: ‘Offering a single point of access to the capital structure will continue to benefit our investors, who will be able to take advantage of the favourable market conditions for alternative lenders. We look forward to continuing our work with Savills IM in offering a comprehensive debt finance platform.’
