AREA Property Partners has sold a 35%, non-controlling stake in the private equity real estate business to nabInvest, the direct asset management group of National Australia Bank.
The deal gives AREA balance-sheet strength to raise more funds and pursue acquisitions. It will also bring more international coverage, given that NAB’s institutional distribution capabilities are based mainly in Australia and New Zealand.
AREA will launch a successor fund to its European vehicle later this year or early next and a follow-on venture to its US debt and value-added businesses.
Its capacity for European investment is $500m – the remaining equity from AREA European Real Estate Fund III. Bill Benjamin, AREA’s Europe and Asia chief executive and global chief operating officer, said: “We have emerged from the recession as a strong, credible investment manager.
“We see a very favourable growth and investing horizon in the next few years; the competitive landscape has changed. Our partnership with NAB puts us in a position to take advantage of the recovery.”
AREA will continue to operate under chairman William Mack and global chief executive Lee Neibart, with management maintaining full discretion over all investment decisions.
Neibart said: “The partners are keeping every dollar of this transaction in the company.” Talks began last year between AREA and NAB, which wants to increase its stakes in alternative investment managers. The deal follows sales of stakes by other private equity real estate firms to big companies, such as Europa Capital to Rockefeller Group.