Global investment manager Schroders has inked a deal to acquire Algonquin, a specialist pan-European hotels investment and management business with assets under management (AUM) of €1.8 bn.
Financial details were not disclosed.
The deal, which comes in tandem with Schroder Real Estate Capital Partners' launch of a UK debt fund together with debt advisor Venn Partners, includes the acquisition of various co-investments alongside Algonquin’s existing clients.
'This acquisition complements Schroder Real Estate's existing focus in sectors including offices, retail, logistics, self-storage and large multiple-use sites,' said Duncan Owen (pictured), global head of real estate at Schroders.
'Our strategy has been to concentrate on what we define as winning cities which benefit from key structural themes of urbanisation, changing demographics, technological innovation, the shifting demand from Asia and strong infrastructure.'
According to Schroders, the acquisition of Algonquin accelerates the growth of its real estate business and complements its existing capabilities and expertise.
Significant boost to growth
'This acquisition is a significant step in the growth of our private assets and alternatives business which is of strategic importance to the group and totals around £33 bn AUM (€37 bn),' the company said in statement. 'This capability includes securitised credit, private equity, infrastructure finance, insurance-linked securities and SME lending alongside the real estate business which is the largest component with assets over £13 bn.'
Founded in 1998, Algonquin began by investing in hotels with its own capital and directly managing them. The group currently manages assets across Europe, comprising more than 7,500 hotel rooms . These hotels are primarily managed through Algonquin’s own brands or franchises including Sheraton, Marriott, Hyatt, Radisson and Sofitel.
'Algonquin’s track record will complement our strong investment performance with over 85% of our AUM outperforming over the last 1, 3 and 5 years,' added Owen. 'Their client base includes some of Europe’s largest financial institutions and the quality and experience of its employees are some of the principal reasons why Schroders is acquiring the business.'
Access to new assets
'Becoming part of Schroders, a FTSE 100 global investment management business, provides Algonquin with access to new assets, a broadly based real estate team with 13 offices across five continents and an enhanced proposition for clients,' said Jean-Philippe Chomette, founder of Algonquin. 'Schroders’ stable long-term ownership structure and heritage is aligned with Algonquin’s investment philosophy.'
Frederic de Brem, current CEO of Algonquin, who is set to join Schroders as head of Schroder Real Estate Hotels, added: 'The Schroders real estate team has an excellent track record in various sectors such as offices, retail, logistics, residential and self storage and we are delighted to be part of its expansion into the hotel sector.
'We believe it is a large market supported by strong fundamentals of growing occupational demand and a sector offering strong income growth for investors.'
According to Schroders, the integration of the two businesses will begin immediately.