PATRIZIA Immobilien AG
Wolfgang Egger
"This acquisition is a perfect fit for our growth strategy."
Augsburg-based fund manager Patrizia Immobilien has acquired rival Triuva, the institutional fund subsidiary of IVG Immobilien, for an undisclosed sum, propelling into the ranks of the top 10 European investment managers, it announced this month.
The acquisition boosts Patrizia’s AUM by around 50% to more than €30b and significantly increases its exposure in Germany and Europe.
‘This acquisition is a perfect fit for our growth strategy,’ said Patrizia’s CEO, Wolfgang Egger. ‘It will strengthen our European network, expand our market presence and broaden the range of products and services for our clients.’
Triuva manages around 40 funds and partners with more than 80 institutional investors. It employs 200 workers across its 15 European locations. The Frankfurt-based company focuses on commercial real estate in the office, retail and logistics sectors as well as infrastructure. It currently manages around €9.8b of AUM.
IVG hired investment bank Rothschild in June to explore alternatives for the possible divestment of Triuva. Almost from the off, rumours swirled in Germany that Patrizia was keen to snap up the rival fund business. Around 60 companies expressed an interest in Triuva, according to IVG. DIC and Hamburg Trust are believed to have been among the final bidders. DIC declined to comment. Hamburg Trust could be reached for comment.
For Patrizia, one of the main advantages of the acquisition is that it will enable the group to enter the infrastructure market, a company spokesman told REFIRE.
In addition, the volume of funds managed by Triuva would have been very enticing, one property advisor in Germany, who asked not to be identified, told REFIRE: ‘Patrizia’s business model has been fee-driven, so acquiring 40 more funds would be a very attractive proposal,’ he said. ‘I imagine there are a lot of opportunities to optimize Triuva’s portfolio.’
The sale of Triuva marks the latest milestone in the realignment of IVG’s business activites, following its insolvency in 2014. It has engineered some sizeable disposals, including the sale of its German office arm, OfficeFirst Immobilien, to Blackstone Real Estate Partners IV for around €3.3b last November. The whirlwind deal, the biggest of its kind last year, reportedly took less than two weeks to put together, after IVG shelved plans to float OfficeFirst.
And the group has come a long way in the past five years, another analyst, who asked not to be identified, told REFIRE: ‘A few years ago, it primarily invested in housing, now it has moved into food retail in a big way. It has really expanded,’ he added.
Patrizia intends to fully integrate Triuva, its spokesman said. Closing of the deal is subject to approval by BaFin and the anti-trust authorities in Poland and Germany. The deal is expected to close by the end of the first quarter next year.
Patrizia increases profit guidance for 2017
Following the acquisition of Triuva, Patrizia has increased its profit guidance for 2017. It now expects to deliver an operating income of slightly above €75m, up from the previous guidance of between €60m to €75m.
‘In 2017, our strong investment track record delivers a high volume of performance fees leading to an increase in our full-year guidance” said Karim Bohn, CFO of Patrizia.
The group’s operating income for the first nine months of 2017 stood at €46.6m, up 6.1% y-o-y. Assets under management increased by €1.9b in the first nine months of 2017 to €20.5b. With the inclusion of Sparinvest Property Investors (SPI), the Copenhagen-based fund-of-funds manager acquired by PATRIZIA in October, the Company expects a net increase in AUM of around €3b in 2017 to around €21.6 b of AUM.
In the period under review, total service fee income – including recurring revenues generated from management fees, transaction fees and performance fees in particular – increased by 5.2% to €128.8m, compared to €122.4m during the same period in 2016.
