Mid-sized managers attract US suitors


Are opportunistic investment managers AREA and MGPA in negotiations to sell themselves to bigger beasts because it has just got too darned difficult to raise enough capital to run profitable funds? That is one view doing the rounds.

Both are large enough to have something interesting to offer to the queue of American firms who believe now is the time to pounce and bulk up. AREA has a strong European business plus the original US business – which is said to have found it harder to raise capital in the current competitive environment. The sale to Los Angeles-based Ares Management, which has nearly $60bn of assets under management in the US and Asia, will see founder William Mack and his son cash in and bow out.

MGPA has c100-strong teams of experienced people in both Europe and in Asia but has struggled to raise followon vehicles anywhere near the size of its 2007-08 vintage Europe and Asia Funds 3. It’s in talks to sell to US fixed-income giant BlackRock, which is hugely underweight in real estate. But smaller, European-only managers may not have the same allure, so this is not necessarily the start of a wave of selling up.