M&G Real Estate acquires majority stake in European fund manager

M&G Real Estate has acquired a 65% stake in BauMont Real Estate Capital Limited (BauMont), a European real estate fund manager specialising in value-add investment strategies in Western Europe.

Established in 2017, BauMont’s 18-strong team is led out of Paris and London with €1.5 billion of assets under
management and a management team with an investment track record of more than 20 years in European valueadd real estate.

The acquisition is part of M&G’s strategy to selectively add investment capabilities in areas where active management has the potential to deliver alpha to clients over medium to long-term investment horizons.

BauMont will join forces with M&G’s £40 billion global real estate business, enabling M&G to expand its client proposition beyond its established core commercial, residential and debt strategies – and the ability to invest
throughout the full property cycle, unlocking potential returns through active management.

In turn, BauMont will benefit from M&G’s significant pan-European real estate platform, alongside its global distribution capabilities that have been expanded in recent times to meet the growing needs of institutional investors in Europe and Asia.

Separately, M&G’s With-Profits Fund – which invests and manages the long-term savings on behalf of 4.6 million
UK policyholders – is investing €200m in BauMont’s latest fund and is seeking to secure higher returning
opportunities in European value-add property in the UK and France for its wider £13 billion real estate allocation.

Investor intention surveys have shown that European and Asian investors see the market potential of value-add real estate strategies, especially at this point in the cycle. As urbanisation and economic growth continue to drive demand for high-quality real estate, value-add is poised to play a crucial role in the real estate allocations of global
institutional investors.

Tony Brown, global head of M&G Real Estate, said: “This new partnership is an opportunity to broaden the real
estate strategies we offer at a time when the asset class is back in focus for global institutional clients who are
considering increasing their allocations at this stage in the cycle.

“Throughout our extensive history of real estate investing, we have continued to strive for excellence and can now
provide clients with a compelling proposition throughout the real estate cycle - and across the capital stack. We
look forward to a long and successful partnership with BauMont.”

Robert Balick, managing partner at BauMont, added: “European real estate markets are adjusting to the higher
rate environment and are entering a new cycle of growth where demand is focused on a limited supply of highquality assets. Value-add strategies can take advantage of re-set entry pricing, whilst actively repositioning assets
to meet the needs of modern occupiers.

“We are delighted that M&G is becoming a majority shareholder in our business and we look forward to unlocking
the significant growth opportunities that this strategic partnership will create to deliver enhanced value to our
investors.”