On June 24, TIAA-CREF and Henderson Global Investors announced two significant real estate transactions. TIAA-CREF agreed to acquire the North American real estate business of Henderson. That business has more than $2.5 billion in AUM.
In addition to the acquisition, the two companies formed a new joint venture — TIAA Henderson Global Real Estate — which initially will have about £13 billion ($20 billion) in assets under management. Henderson Global Investors contributed its European and Asian property business with $16.9 billion in AUM; TIAA-CREF contributed its European real estate business with $3.1 billion in AUM and paid Henderson a cash payment of $175.7 million, which was also for the acquisition of Henderson's North American property business.
The new entity will be 60% owned by TIAA-CREF and 40% owned by Henderson.
TIAA-CREF has a “one-off” option to purchase up to an additional 15% stake in TIAA Henderson Global Real Estate.
According to Pensions & Investments data, the new entity would be the 15th-largest real estate manager and the fourth-largest manager of non-U.S. real estate assets. The supermajority of assets are in Europe.
This article originally appeared in the July 8, 2013 print issue as, "DEAL SPOTLIGHT: TIAA-CREF/HENDERSON".