Acquisition

RNS Number : 2281Y

Quintain Estates & Development PLC

28 February 2012

 



28 February 2012

Quintain Estates & Development plc

("Quintain" / "Group")

Quintain exceeds target of £2bn assets under management through

the acquisition of Grafton Advisors (2006) LLP

Quintain announces that it has acquired the specialist central London strategic property adviser, Grafton Advisors (2006) LLP ("Grafton"), for a cash consideration of £5.75 million.

Grafton's principal business activity is to act as property adviser to the West End of London Property Unit Trust ("WELPUT"). WELPUT is a leading institutional investment fund that owns a high quality portfolio of predominantly office properties in London's West End. Schroders acts as manager to the Fund which, as at 31 December 2011, had gross assets of £872.2 million.

Through the acquisition of Grafton, Quintain has increased assets under management to £2.3 billion, surpassing its strategic target of £2.0 billion twelve months ahead of schedule. The transaction will also increase the Group's recurring income, deliver upside potential through performance and development fees and add a second pooled investor fund to the Fund Management business alongside Quercus, Quintain's long-term healthcare fund.

The Grafton management team (the "Grafton Team"), comprising Nigel Kempner, Paul Connellan and Christopher Cope, will join Quintain together with three employees, increasing the breadth and depth of specialist sector knowledge within the Group. The team has an outstanding track record of delivering value for investors. The principal role of the team will be to continue to advise WELPUT, and Nigel Kempner will also become Head of Fund Management at Quintain.

In addition to the cash consideration, the Grafton Team will be issued with Unsecured Loan Notes ("Loan Notes") which will be redeemable to the extent that certain fees, including performance fees arising from WELPUT, are earned over the next five years. These qualifying fees will be shared equally between the Grafton Team and Quintain, with the maximum amount receivable by the Grafton Team being £5.0 million. The Loan Notes will carry a 2% coupon from the date of issue and the holders will have the right to apply the proceeds in subscribing for Quintain ordinary shares at a price of 55 pence per share, representing a 30% premium to the volume weighted average price for the five days to 27 February 2012.

Commenting on the acquisition, Adrian Wyatt, Chief Executive of Quintain, said:

"The acquisition of Grafton achieves our strategic objective of increasing assets under management to well above our £2.0 billion target, 12 months ahead of schedule. The transaction enhances the Group's recurring income, offers substantial upside potential through performance and development fees and increases the breadth and depth of expertise within Quintain. Nigel Kempner's experience and track record in the property sector is extensive and we look forward to the contribution that he and his team will undoubtedly make to the Group's future success."

Commenting on the transaction, Nigel Kempner, Chairman and founder of Grafton, added:

"I am delighted that Grafton is becoming part of Quintain, which I consider to be one of London's leading regeneration specialists. Joining forces with Quintain's Fund Management business is a highly positive step for both parties, bringing expertise in a further specialist sector to Quintain while giving the Grafton team access to wider resources that will support our record of delivering outperformance. We look forward to becoming an integral and valuable part of the Quintain business."

For further information, please contact:

Quintain Estates & Development plc

Maxwell James / Cressida Curtis

Tel:    [phone]

Grafton Advisors

Nigel Kempner

Tel:    [phone]   

FTI Consulting

Dido Laurimore / Toyah Simpson

Tel:    [phone]

Quintain

Quintain is a listed UK property company operating through two businesses: Urban Regeneration and Fund Management.

In addition to the management of WELPUT acquired through this transaction, Quintain acts as asset manager to the Quercus Property Partnership, which has approximately 50 investors and is managed by Aviva Investors. Additional property vehicles within the Fund Management business include the iQ Student Accommodation Fund, a 50/50 joint venture with Wellcome Trust, the secondary property fund SeQuel, and a science park joint venture with Aviva Investors, Quantum. www.quintain.co.uk 

WELPUT

West End of London Property Unit Trust (WELPUT) was established in 2001 as a closed-ended Jersey property unit trust. The aim of WELPUT is to provide investors with an exposure to the West End office market. The objective is to outperform the market as measured by Investment Property Databank (IPD). 

The primary investment focus is office properties in the West End of London, particularly large, multi-let buildings. Due to the nature of properties within the West End there will be elements of other uses such as retail and residential.

The manager of WELPUT is Schroder Property Managers (Jersey) Limited ("SPMJ"), one of the largest managers of Jersey property unit trusts, covering various sectors of the UK market. SPMJ is a subsidiary of Schroders PLC, the global asset management company with £182.2 billion of assets under management, as at 30 September 2011.

Currently WELPUT has 11 properties with a gross value of around £875 million. In 2011 the Fund provided a total return of 17.4 per cent.

Schroders' Property Business

Schroders has managed property funds since 1971 and, at 30 September 2011 had £9.5bn of gross property assets under management. It has over 90 property staff located in nine offices across Europe.

All of the property funds referred to are unauthorised collective investment schemes, as defined in the Financial Services and Markets Act 2000. Promotion of these funds is restricted and access to full information about these funds is only available to those exempt from the restriction. www.schroderproperty.com 

 

END

 

 

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