GAM Group will acquire the real estate finance business of Renshaw Bay, pending regulatory approval.
The deal is expected to close in October and will bring $1.2 billion of committed investor capital in Western European commercial real estate loans to GAM, said a joint news release from both companies.
The terms of the deal will not be disclosed until March 2016 in GAM’s annual report, said Larissa Alghisi Rubner, a GAM spokeswoman, in an e-mail. She added the deal includes an upfront cash payment and a contingent payment, which will be settled over a five-year period, determined by the net income generated by the acquired business.
Renshaw Bay’s 10-person real estate finance team, led by Jon Rickert, head of real estate finance, will become GAM employees. They will create GAM-branded investment strategies that invest in senior and mezzanine debt, backed by real estate in the U.K. and Europe, the news release said.
“The persistent low-yield environment makes private real estate investments enormously attractive. As an asset class, it is a prime area for active managers to excel and one we have not offered our clients in the past,” said Alexander S. Friedman, GAM’s group CEO, in the release.
GAM managed a total of $132.8 billion as of June 30.