Union Investment acquired a 10% stake in a private real estate debt manager aam2cred Debt Investments, a spokesman said.
Terms of the deal, which closed Wednesday, were not disclosed.
Union Investment is adding private debt real estate expertise with this acquisition, the spokesman said. However, the firm already runs real estate and other alternative strategies. It has €47 billion ($56.6 billion) in real estate assets under management, while alternative investments, excluding hedge funds, amount to €6.5 billion in assets under management. Aam2cred's assets under management were not available.
Union Investment will be launching a range of mezzanine and loan funds for institutional clients as a result of the stake, the release said.
While Union Investment will focus on client relations, regulation, reporting and fund administration, aam2cred Debt Investments will be responsible for the management and investment advice associated with the funds.
Union intends to gradually increase its share in the company over the next few years, according to a news release Thursday.
"Private debt is a high-growth market within asset management and aam2cred has a great deal of expertise in mezzanine and whole loan finance within the real estate market. This alliance will enable us to expand our future product and service offering in the area of alternative investments for institutional clients," Hans Joachim Reinke, CEO of Union Investment, said in the release.
"By combining the expertise of Union Investment with that of aam2cred, we will be able to offer our institutional investors innovative and bespoke solutions for profitable investments at a time of low interest rates," Mr. Reinke said.
Nico B. Rottke, managing partner at aam2cred, added in the release: "We see ourselves as highly professional specialists in mezzanine and whole loan financing for real estate and thus as a partner for real estate developers and investors."
Union had €359.8 billion in assets under management as of June. 30.
