The United Services Automobile Association (USAA) - a financial services provider for US military personnel - has agreed to sell a controlling interest in its property arm USAA Real Estate (USAARE) to the current management of USAARE and a private investment group.
Financial details were not disclosed, but USAARE is the owner of a $30 bn portfolio in the US and Europe.
USAA said that it will retain a 'significant ownership stake' in the business. Len O’Donnell, President and CEO of USAARE will continue to lead the business, and the company will remain the exclusive investment manager for USAA’s real estate portfolio.
The move is in line with the group's plan to simplify its operating structure enabling it to better serve members through its core businesses of banking, auto, home and life insurance, and retirement products. The deal reduces many financial service regulatory requirements for USAARE and allows it to grow in a more profitable way, it added.
'We believe both USAA and USAA Real Estate are best served by creating this strategic relationship and enabling the investment management business to operate more independently,' said USAA CEO Stuart Parker. 'We will continue to deliver on USAA’s mission to serve the financial needs of the military community with the quality, speed and service members expect and deserve.'
'We remain as committed as ever to producing great results for USAA and its members,' said USAA Real Estate President and CEO Len O’Donnell. 'This change enables us to provide an even greater level of service to our clients and partners as we strive to maximize performance for their portfolios. It creates a deeper and richer alignment between our clients, USAA and the management team, from which all will benefit immensely.'
USAA Real Estate is planning to maintain its current workforce.
The transaction is expected to close in early 2020, subject to certain regulatory and other customary approvals, conditions and consents.