REAL ESTATE - Schroders says it has agreed to buy German real estate asset manager Aareal Asset Management GmbH for an initial £18.8m (€28m) from Aareal Bank.
Wiesbaden-based AAM has €1.9bn in assets under management and manages seven property funds across European markets, and has offices in Amsterdam, Milan, Luxembourg, Stockholm and Paris.
Its main clients are pension funds, insurance companies and government organisations. Schroders’ marketing head Henrietta Jowitt declined to name them but said AAM is strong in Germany, Italy and the Netherlands in particular.
In its latest interim report Aareal said AAM made a €3m profit for the first nine months, against a €1m loss the year before.
AAM will form part of Schroders' property business which currently has £7.6bn under management. The approximately 50 staff and management will be retained as "there’s no overlap" Jowitt said.
"This acquisition is an important component of our strategy to offer international property products to our client base," said Schroders’ property head William Hill.
"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."
AAM chief executive Charles Pridgeon said: "This is good news for AAM and our clients.
"With the commitment, resources and distribution strength of one of the world's leading asset managers, we are now in a great position to expand further in Europe.
"Crucially, AAM and Schroders share the same 100% focus on asset management, and I am excited at the opportunities that lie ahead as we join forces."
Aareal bank managing board member Hermann Josef Merkens said: "The sale marks yet another major step towards leveraging our medium-sized corporate structure. This will further increase our focus on continued growth in our core Structured Property Financing and Institutional Housing businesses."