The death of the small European investment manager – The Property Chronicle
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The death of the small European investment manager

Investor's Notebook


Established talent is being hoovered up – where are all the start-ups vying for their place? 

Small real estate investment managers are becoming a critically endangered species across Europe as property investors and international fund managers across the world buy them up. Not all investments are structured as an outright buy – some acquisitions are phased through progressive stake building or by call options. All, however, seem to be motivated to ultimately achieve full ownership.

The key rationale of the acquisitions is to secure the services of entrepreneurial individuals and, in doing so, to gain access to their pipeline of deal opportunities. For these international purchasers the alternative to acquiring is the risky and time-consuming process of building a team organically with the necessary experience and track record across major European jurisdictions. To senior management with fund raising targets and/or money to deploy, the lost time of building a team is simply not a pragmatic option. After all, get one large real estate deal right and the costs of buying the team will seem minor!

International investors strongly favour buying full-service investment management platforms for their regulatory credentials and for their strong annuity income streams, as investment management services generally have long contracts and strong margins. Less favoured are the small non-regulated operator platforms providing lower-margin asset management revenues, which tend to be secured only for the business plan duration of an investment. International investors typically regard these platforms for their potential, at best, for a series of one-off asset deals.

The top targets for international investors are platforms that are both regulated in multiple jurisdictions and are well embedded into at least several major European real estate markets. Both attributes usually indicate the target is going to be immediately accretive to transaction capacity. The ability to run investment vehicles on a pan-European basis is very valuable because the reality is that, despite half a century of European integration, each countries’ real estate market is still remarkably bespoke.

Investor's Notebook

About Michael Walton

Michael Walton

Michael Walton founded Rynda Property Investors LLP - an independent FCA regulated real estate investment house - in September 2005. Michael is a Chartered Surveyor with over 30 years’ industry experience. His skill-sets include structuring real estate joint ventures and funds in Europe for institutional, shari’ah and high net worth investors and the subsequent deployment of capital. Rynda establishes investment products across the risk spectrum and via local teams proactively manages the assets acquired to maximise net operating incomes and investment performance. Rynda always seeks to back its judgement by co-investing with its clients. Though focusing primarily on Western Europe, Michael is also familiar with both Scandinavian and Middle Eastern markets. Prior to setting up Rynda, he was a Managing Director at Citigroup Property Investors (1998-2005) where he was responsible for all investment strategies throughout Europe. Michael has previously worked at Lazard Brothers & Co. Ltd (1994-1998) and Touche Ross (1992-1994) and holds an MBA from Cass Business School and an MA from the University of Cambridge.

Articles by Michael Walton

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