The partnership, which is subject to regulatory approval, is meant to add to the real estate investment capabilities of Principal Global Investors (PGI), the US-headquartered global asset management firm, according to a statement from the firm.
“Real estate investment has received strong traction from investors in Asia. This strategic partnership will allow us to expand our geographical offer to pan-European markets,” said Celestine Khoo, head of Asia ex Japan at PGI.
As part of its multi-boutique operating model, the firm operates Principal Real Estate Investors in the US, which manages $74.9bn in commercial real estate. The new partnership will expand its capabilities into European real estate.
Internos Global Investors caters to institutional investors, offering pan-European real estate fund and asset management platform. It has a headquarters in London and seven offices throughout western Europe. It manages $3.25bn of assets, according to the statement.
After the partnership is approved by regulators, Internos will become one of the boutique asset managers under the Principal umbrella. It will adopt the name Principal Real Estate Investors Europe, while retaining management and investment teams, and operating independently within the organisation.
Real estate remains an attractive alternative asset class, particularly among Asian investors, offering diversification from equities and fixed income. Recently, FSA profiled two real estate mutual funds. Separately, FSA also found that direct investments in property in markets such as Hong Kong tend to deliver better returns than real estate mutual funds.