F&C agrees to purchase Reit for £60m

F&C has agreed to buy property investment group Reit Asset Management for £60m.

The deal will see F&C’s current property asset management operations combined with Reit to form F&C Reit Asset Management.

The new company will focus on commercial property in the UK and Europe and be headed up by executive chairman Leo Noé, the current chairman of Reit, with Nick Criticos of F&C becoming chief executive.

The deal could prove an attractive selling point for any potential buyer of the asset manager as speculation continues that Friends Provident is looking to offload its 52 per cent stake in the company.

Dawnay Day recently sold its 20 per cent holding in the business for a £70m loss after coming under pressure from margin calls.

Reit has been involved in commercial real estate for a number of years and already has a presence in a number of key and growing markets such as India, Israel, Turkey and the UK.

F&C Reit Asset Management will be 70 per cent owned by F&C and 30 per cent owned by Mr Noé and partner Ivor Smith. They will receive £25m in cash and £35m in loan notes for their business.

Under the terms of the deal, Mr Noé and Mr Smith will be able to increase their stake in the company to 40 per cent by the end of 2014.

Alain Grisay, chief executive at F&C, said: "This transaction is consistent with the development of our multi-specialist business model and the strategic direction of our three-year plan. It will increase our geographic scope, widen our product range and deepen our expertise in property asset management, which is a core long-term asset class for our clients."