US company Cornerstone acquires Protego

Protego, the UK and continental European real estate investment management company, is being acquired by Cornerstone Real Estate Advisers, a wholly owned subsidiary of the Massachusetts Mutual Life Insurance Company (MassMutual).

Charles Weeks, head of Business Development at Protego, told PropertyEU that the move would provide Cornerstone with a European platform and give Protego the financial muscle to expand its offering.

'Before this acquisitions we relied on Protego individuals to use their own capital - and that is limited - for co-investment purposes. Now we have a more significant balance sheet and that should enhance what we are able to show investors in terms of new products and new funds.'

Weeks said the tie-up would also improve the flow of capital to and from the US. He said initially the flow would probably be from European investors into US real estate. 'But we would expect in time that we would attracting significant amounts of US capital into the UK and European markets. This is very much the intention of this transaction.'

Simultaneous to the Protego transaction, Cornerstone will integrate the Real Estate Finance Group of Babson Capital Management, also a subsidiary of MassMutual, into Cornerstone, effective in the first quarter of 2010. REFG specialises in commercial mortgage lending and related products and has USD21bn in assets managed and serviced.

The newly expanded Cornerstone will become a subsidiary of Babson Capital Management as part of this change. The new combination of Cornerstone, REFG and Protego will manage about EUR 30 bn of real estate assets.

Protego was established by Weeks, Iain Reid (CEO) and Hugo Llewelyn (Head of Investment) in April 2004. The firm now has 30 staff in the UK and Continental Europe. It opened offices in the Netherlands and Sweden in March 2006 and September 2007 respectively. Protego has approximately $2.5 bn of assets managed and serviced in the UK, Sweden, Finland and Germany.

The parties said the acquisition of Protego provides Cornerstone with a substantial and established European platform with an exceptional institutional client base from the UK as well as Continental Europe.

In a statement, they said the Protego platform would provide further expansion opportunities in Europe and also a conduit for US capital investing into Europe and likewise for European capital investing into the US.

* The full interview with Charles Weeks will appear in the December edition of PropertyEU Magazine.