Schroders to buy Aareal Asset Management

Schroders is buying Germany's property manager Aareal Asset Management (AAM) from its sole owner Aareal Bank. Under the terms of the agreement, Schroders will pay EUR 28.mln, including EUR 6 mln of net tangible assets in cash, on completion of the acquisition of 99.75% of the share capital in AAM.

Schroeders said it has agreed to acquire certain investments owned by Aareal, in the underlying funds managed by AAM that are currently valued at EUR 21.4 mln. It may also acquire further investments managed by AAM for up to EUR 29.8 mln in the event that they are not sold by Aareal prior to the end of March 2007 when the deal closes.

AAM's first fund launched in 1999 and it now has EUR 1.9 bn of assets under management. It manages seven property funds across European markets. The Company is headquartered in Wiesbaden with offices in Amsterdam, Milan, Luxembourg, Stockholm and Paris. The main clients of AAM are insurance groups, pension funds and government organisations. AAM will form part of Schroders' property business which currently has EUR 11.3 bn of assets under management, up from EUR 300 mln fifteen years ago.

In the last 12 months, Schroders has launched two European property funds of funds which provide investors with diversified exposure to European real estate, and global and Asian property securities funds. 'This acquisition is an important component of our strategy to offer international property products to our client base. What attracted us to AAM was the entrepreneurial nature of its management, its investment platform in the major European markets and the excellent fit with our own business,' William Hill, Schroders head of property, said.

Completion of the transaction is subject to regulatory approvals.