MSREF may sell German asset management arm to a private equity firm
Morgan Stanley Real Estate Funds is in talks with two potential bidders for its real estate asset management and loan servicing business in Germany, called Argoneo. The group manages property worth more than €5bn.
A buyer could emerge in the shape of a private equity group looking to build up its loan servicing capabilities, in the way that Apollo did by hiring staff from Hudson Advisors. “Several parties are out there pitching for a number of portfolios that are coming to the market,” said one loan servicer.
“Some of these private equity shops, such as Blackstone, Oaktree and Cerberus, are already teamed up with another entity; others are looking to replicate the structure Apollo has with its own work-out team. I think that’s where the main interest would come from.”
US-owned Situs, which is expanding its presence in Europe, is thought to have approached Morgan Stanley in the US through its local connections. However, it was told that MSREF was already at a relatively advanced stage with two other bidders.
Capita recently beat Hatfield Philips to buy Barclays Capital Mortgage Servicing, while CB Richard Ellis is also said to be on the hunt for takeover targets. Argoneo was created in 2007 and is 75.1% owned by Morgan Stanley Properties Germany and 24.9% by Corpus Sireo.
It had 35 staff two years ago and has offices in Hamburg, Berlin, Munich and Frankfurt, where it is headquartered. The company’s main role has been to manage the European assets bought by MSREF funds, 86% of which are prime office properties in Germany. MSREF amassed one of the largest property empires there, comprising more than 2m m2 of space over 200 assets, once valued at more than €9bn.