BlackRock Broadens CRE Reach with MGPA Buy

LONDON-BlackRock Inc., the world's largest asset management firm, has signed a definitive agreement to acquire private equity real estate firm MGPA, the two companies announced Tuesday. The planned acquisition of MGPA, which focuses on Europe and Asia-Pacific, nearly doubles BlackRock's real estate business to $25 billion in pro forma assets under management worldwide as of March 31, according to a release. Deal terms were not disclosed.

In a release, Jack Chandler, BlackRock's global head of real estate, says the agreement advances his company's growth strategy in Asia-Pacific and Europe, “where we are seeking to enhance our local offerings and build on the firm's real estate experience.” Further, he says, the move “strengthens our ability to offer clients an unrivaled set of solutions to the challenges of a low-return, high volatility environment, including access to MGPA's top-performing investment teams and exceptional capabilities in key markets.” The planned acquisition gives BlackRock experienced investment teams in the world's top six markets, representing 75% of the investable CRE universe, the release states.

The transaction is expected to close in the third quarter, subject to customary regulatory approvals and closing conditions, according to the release. The financial impact of the transaction will not be material to BlackRock earnings per share, the company says.

MPA was represented by Berskhire Capital, which was hired last year to find a buyer. The PERE website reported Tuesday that BlackRock had emerged as a front runner in bidding among nearly 20 potential buyers last month, but its bid was not announced formally until Tuesday's announcement.

Headquartered in London, MGPA currently has $12 billion in AUM and operates from 13 offices in Europe and Asia-Pacific. BlackRock's AUM was $3.9 trillion as of March 31.