Henderson Group and TIAA-CREF establish global real estate alliance
Henderson Group and Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF) have agreed to combine their European and Asian real estate businesses to form TIAA Henderson Global Real Estate, with assets under management of approximately GBP13bn (USD19.8bn).
In a related sale, Henderson will also sell its North American real estate business to TIAA-CREF.
Henderson will own 40 per cent of TIAA Henderson Global Real Estate, which will have access to a strong source of capital from TIAA-CREF enabling it to invest alongside clients to grow the business further.
Henderson will receive cash proceeds of GBP114.2m (USD176.6m) (before deal costs), further strengthening its balance sheet and capital position.
The transactions value Henderson's property business at 8.8 times property's 2012 EBITDA.
Henderson will be a simplified business with core strengths in global and European equities, absolute return, multi-asset and global fixed income investment management.
Andrew Formica (pictured), chief executive of Henderson Group, says: "Henderson has long recognised that its property business would benefit from greater scale and access to capital to accelerate its future growth. We are delighted to have a financially strong and ambitious partner in TIAA-CREF who shares our absolute commitment to serving clients' needs. With their added expertise and resources, I am confident that our clients and shareholders will benefit from this relationship."
Roger W Ferguson Jr, president and chief executive officer of TIAA-CREF, says: "This partnership enables TIAA-CREF to further diversify our investments into new markets as we continue to expand our asset management business globally. Real estate has been a key part of our investment platform since 1934. We are pleased to partner with Henderson as we launch this venture, and together seek new opportunities on behalf of our clients."
James Darkins, chief executive officer designate of TIAA Henderson Global Real Estate, says: "The combination of TIAA-CREF's and Henderson's European and Asian real estate interests creates a new powerhouse in global real estate. Between us, we have the scale and capital resources to serve the real estate investing needs of our existing clients, as well as create exciting new opportunities to co-invest alongside them around the globe."