BlackRock to acquire real estate manager MGPA

The acquisition will give BlackRock a $12 billion real estate business in Asia, Europe

BlackRock (BLK) announced Tuesday an agreement to acquire MGPA, a London-based private equity real estate investment manager.

Terms of the deal, which is expected to close during the third quarter, weren't disclosed.

With MGPA offices throughout Asia, the acquisition is in line with a priority outlined late last year by Mark McCombe, BlackRock's Asia-Pacific chairman, to build the firm's alternatives manufacturing capabilities in Asia.

In a joint BlackRock- MGPA news release Tuesday, Mr. McCombe said the acquisition would be “an important step in the evolution of our Asia-based investment capabilities and is aligned with the growth of our Asia-Pacific franchise."

MGPA had assets under management of about $12 billion as of March 31. BlackRock's real estate business has about $13 billion under management.

In a telephone interview, James Quille, MGPA's Singapore-based executive chairman, said with BlackRock's U.S.- and U.K.-focused real estate operations having virtually no presence in Europe or Asia, the two firms' businesses are almost perfectly complementary.

Mr. Quille said roughly 63% of MGPA's real estate investments are based in Asia, with the remaining 37% in Europe.

MGPA's client base, meanwhile, is 42% in North America, 24% in Australia, 19% in Europe and 15% in the Middle East. Clients include corporate and public pension funds, superannuation funds and sovereign wealth funds, said Mr. Quille.

With MGPA's continued outreach to Asia-based clients, and the addition of BlackRock's distribution muscle in the Asia-Pacific region, there's reason to anticipate broadening the business' client base to institutional investors in Asia as well, Mr. Quille said.