Companies combine European and Asian real estate businesses to form leading real estate venture
Provides clients with new investment opportunities and expanded global reach
New York and London, June 24, 2013 — TIAA-CREF, a leading financial services provider, and Henderson Global Investors (“Henderson”), one of Europe’s largest investment managers, today agreed to launch a new global real estate investment management company, TIAA Henderson Global Real Estate. The new company will offer clients expanded investment opportunities in the global real estate market while helping to accelerate the growth of each firm’s real estate business.
- TIAA Henderson Global Real Estate will consist of TIAA-CREF’s European real estate business, Henderson’s European and Asia Pacific-based real estate businesses, and a new global distribution and client service organization.
- The new company will provide access to global capabilities in the office, retail, logistics, multi-family and commercial real estate debt sectors.
- In a related transaction, TIAA-CREF is acquiring 100 percent of Henderson’s U.S. real estate business.
- TIAA-CREF will continue to manage its own North American real estate business, and also provide investment management services for the new venture.
- The combined total of real estate assets under management for TIAA-CREF and the new venture is $63 billion (£41.5 billion).i
- TIAA Henderson Global Real Estate will create a platform with significant scale, enhancing access to investment opportunities and debt markets, and increasing capacity to develop and offer new products.
- A joint board of directors will oversee an experienced management team, combining the expertise from both TIAA-CREF and Henderson.
- TIAA-CREF will hold a 60 percent interest and Henderson a 40 percent interest in the new venture.
- Interests will be aligned with clients through co-investment and seeded investment opportunities.
- TIAA-CREF and Henderson have agreed to explore other strategic opportunities beyond the real estate sector. Select Henderson mutual funds are currently available through TIAA-CREF’s institutional retirement and retail brokerage platforms. The companies will also explore ways to further capitalize on other product and service capabilities that each party may offer.
- Pending regulatory approvals and customary conditions, the transaction is expected to close in the first quarter of 2014.
TIAA Henderson Global Real Estate will have exclusive rights to offer direct property and property debt investments outside of North America for both firms. TIAA-CREF will retain its North American real estate business, which supports its retirement plans, and will also provide real estate investment management services for the new venture. Under the agreement, TIAA Henderson Global Real Estate will launch a new business initiative in commercial real estate debt, including co-investment from TIAA-CREF.
The new venture will pursue core and value-add investment opportunities in all major sectors of international commercial real estate. It will also be responsible for distribution and client servicing of real estate products managed by TIAA-CREF for its institutional investors.
Upon closing, Tom Garbutt, head of TIAA-CREF global real estate, will become chairman of the new company, and James Darkins, managing director, property at Henderson will become the chief executive officer. The company will be headquartered in London with offices in Europe, Asia Pacific and North America.
“We believe there are compelling growth opportunities in global real estate,” said Tom Garbutt, head of TIAA-CREF global real estate and chairman of the new company. “This new venture will leverage TIAA-CREF’s financial strength and long-standing real estate investment capabilities together with Henderson’s expertise and wide array of real estate investments in Europe and Asia Pacific.”
“The combination of TIAA-CREF’s and Henderson’s European and Asian real estate interests create a new powerhouse in global real estate,” said James Darkins, chief executive officer of the new company. “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.”
“This partnership enables TIAA-CREF to further diversify our investments into new markets as we continue to expand our asset management business globally,” said Roger W. Ferguson Jr., president and chief executive officer of TIAA-CREF. “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.”
“Henderson has long recognized that its property business would benefit from greater scale and access to capital to accelerate its future growth,” said Andrew Formica, chief executive, Henderson Group plc. “We are delighted to have a financially strong and stable partner in TIAA-CREF which shares our strong commitment to serving clients’ needs. With their added expertise and resources, I am confident that our clients and shareholders will benefit from this relationship.”
Note to editors
TIAA-CREF (www.tiaa.org) is a national financial services organization with $520 bn (c. £342.5 bn) in assets under management (at 31 March 2013) and is the leading provider of retirement services in the academic, research, medical and cultural fields.
The company’s global real estate team invests on behalf of leading institutional investors, and individual investors, through retirement plans in the U.S. nonprofit sector and its own general account. The company has invested in public and private equity and debt real estate investments for more than 70 years, dating back to its first commercial mortgage investment in 1934. TIAA-CREF’s real estate management team has an average of 25 years of investment experience. The company has $44 bn (c. £29 bn) in private real estate and commercial mortgage investments (at 31 March 2013) and is among the largest real estate managers of U.S. institutional tax-exempt real estate assets.
TIAA-CREF has received several recent industry accolades for its investment performance. Lipper named TIAA-CREF as the 2013 Best Overall Large Fund Company based on three-year risk-adjusted performance. The company was one of 36 large investment firms eligible for the award.ii In addition, 97 percent of the company’s mutual funds and annuities have an overall Morningstar rating of three or more stars across all asset classes based on risk-adjusted performance (43 percent three stars, 45 percent four stars and 9 percent five stars, at 31 March 2013).III In addition, TIAA-CREF was ranked 10th out of 62 mutual fund families in the 2012 Barron’s/Lipper fund family ranking, based on asset-weighted performance.ix
Henderson Group plc (“Henderson Group” or “Group”) is the holding company of the investment management group Henderson Global Investors ('Henderson'). Henderson Group's principal place of business is in London and since December 2003 it has been dual-listed on the London Stock Exchange and Australian Securities Exchange (“ASX”). Henderson Group is a constituent of the FTSE 250 and S&P/ASX 200 indices. The Group is incorporated in Jersey and as of late last year tax-resident in the UK.
Established in 1934, Henderson is a leading independent global asset management firm. The company provides its institutional, retail and high net-worth clients with access to skilled investment professionals representing a broad range of asset classes, including equities, fixed income, property and private equity. Henderson is one of Europe's largest investment managers, with $104.6 bn (£68.9 bn) assets under management and employed approximately 1,000 people worldwide (at 31 March 2013).
Henderson has developed a significant property investment capability over the past 30 years. Its property business has more than 500 underlying investors and approximately c. $19.2 bn (£12.7 bn) in assets under managementi and it currently employs over 200 staff across Europe, Asia Pacific and North America. Its property business manages pooled and segregated accounts targeting core and value-added returns across all commercial sectors, Henderson also manages property funds with regional themes.