TIAA-CREF and Henderson Global Investors have launched a new 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. The combined total of real estate assets under management for TIAA-CREF and the new venture is $63 billion.
TIAA-CREF is a national financial services organization with $520 billion in assets under management. Henderson is an independent global asset management firm. The company provides its institutional, retail and high net-worth clients with access to investment professionals representing a broad range of asset classes, including equities, fixed income, property and private equity.
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, multifamily 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.
TIAA-CREF will hold a 60 percent interest and Henderson a 40 percent interest in the new venture.
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,” Garbutt said in a statement. “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.”