Internos Real Investments is set to buy fund management business Invista Real Estate Investment Management for £33.6m.
The two companies have reached agreement on the terms of a recommended offer under which Jos Short and Andrew Thornton’s fund management firm will buy all of Invista’s shares.
The announcement of the agreement begins the closing phase of Invista’s 18-month wind-down process, which was kicked off in October 2010 when shareholder Lloyds transferred mandates for around £2bn of assets to rival Scottish Widows.
At that time Invista REIM signalled its intention to wind down and return money to shareholders and has since seen a number of mandates terminated and moved to alternative investment managers.
Internos picked up two funds previously managed by Invista and recruited its entire Paris team.
The Invista Group had £749m of assets under management as at 31 December 2011, including co-investments in funds to which members of the Invista Group also provide investment management services.
The Invista Group’s current real estate investments comprise co-investments in two closed-ended funds, IREOF and IREIF, which have a five-year duration that expires in February 2013 and May 2013, respectively.
Both may be extended at the discretion of the investment manager for up to two further one-year periods.
The deal is being funded by £3m equity from Internos’ parent IRL and Internos partner Richard Peskin, a £15m loan from Invista and £16m and £300,000 in loans from BAC and Internos respectively.
Invista executive chairman Douglas Ferrans said: “We welcome Internos’ offer, which the Invista directors believe represents the best solution for Invista and its clients and fair value for Invista shareholders, having considered a number of proposals for a sale of Invista.
“The Invista directors concluded that this offer represents fair value and provides the opportunity for shareholders to accelerate the receipt of cash, which through Invista’s asset realisation strategy would have been received over an extended time period and with risks associated with attempting to realise value for Invista’s remaining principal investments, especially given the currently poor market environment.”
Jonathan Short, executive chairman of the Internos Group, said: “Since inception, the partners at Internos have adopted an entrepreneurial approach to real estate investment management.
“We have built a successful track record of acquiring, integrating and turning around fund management businesses – which is exactly what is required here. We look forward to working with Invista’s management to unlock the company’s value.”
Internos chief executive Andrew Thornton said: “Our offer provides both good value and an exit for shareholders in Invista following a long period of uncertainty which began in October 2010 when the board decided an orderly realisation of assets was in the best interests of shareholders.
“The Internos platform has exactly the right mix of expertise and experience in the major European markets and the self-storage sector to realise maximum value from the Invista assets.”
bridget.oconnell@estatesgazette.com
