BlackRock and Deutsche Bank’s RREEF division merge property funds
BlackRock will merge its flagship core UK property fund, the BlackRock UK Property Fund (BUKPF), with the RREEF UK retail, office and industrial property funds following the completion of a scheme of amalgamation on 14 December and a favourable RREEF unit holder vote.
The merger will see BUKPF grow to over GBP2.4bn from GBP2.1bn, by adding 27 investments totalling over GBP335m.
The merger increases exposure to the fund’s target sub-sectors of Central London office, retail warehouse, South East industrial and South East office. In addition, the RREEF portfolio contains a number of active asset management opportunities that BlackRock intends to be accretive to the future performance of BUKPF.
The transaction not only provides BUKPF with greater diversification and opportunity in terms of assets, but also increases and further diversifies the fund’s client base by an additional 64 investors, giving them access to a long standing UK real estate platform with a strong, long term performance track record. BUKPF returned an annualised performance of 8.8 per cent over the past 20 years and 7.6 per cent annually over the past 15 years, respectively.
BlackRock bolstered its UK real estate investment team ahead of this transaction, appointing Justin Brown as managing director and BUKPF portfolio manager, Mark Long as director of research and strategy and John Benham as a vice president and asset manager.
Marcus Sperber, head of BlackRock’s international real estate business and fund director for BUKPF, says: “This is a landmark merger for the UK property funds industry bringing together two well-known names and offering several benefits for investors. With over GBP2.4bn and a 20 year track record of strong performance, BUKPF has the scale to invest in quality assets on behalf of over 400 institutional clients that might not be available to other funds.”