Merger creates Italian fund management giant
ITALY - First Atlantic Real Estate (FARE) and Fondi Immobiliari Italiani (FIMIT) are to merge to create Italy's largest independent real estate asset management company.
DeA Capital, the alternative investments operator that owns 70% of FARE, and FIMIT's shareholders, which include a number of Italian retirement institutions, has agreed the merger.
The new asset management company will have more than €8bn in real estate assets under management, including 19 managed real estate funds (five of which are listed).
DeA Capital will be the largest shareholder in the new company by way of a direct stake (40.32%) and through its majority interest in First IFIM Investment, which will own 20.98% of the new company.
The merger will also see FIMIT major shareholders assume stakes in the new company. The National Insurance Institute for Employees of the Public Administration (INPDAP), which owns 30.7% of FIMIT, will receive an 18.33% stake in the new firm.
The National Insurance Institute for Workers in the Entertainment Business (ENPALS) will own 11.34%, while Italian foundation Enasarco will assume a 5.97% stake, and Inarcassa, the social assistance scheme for engineers and architects, will receive 2.98%.
The merger is intended to strengthen the strategic position of both companies and their links with institutional investors in Italy and to achieve better economies of scale.
FIMIT had previously looked into merging with the real estate asset management arm of Pirelli (now Prelios), but this plan was shelved by the start of 2010.
The operational management of the new asset management company will be assigned to a chief executive, to be appointed by DeA Capital.
Massimo Caputi and Daniel Buaron, the current chief executives of the two merging companies, will be appointed to the board of directors and the executive committee of the new company.
Caputi will also be nominated by the board of directors to oversee the development of the Italian market, while Buaron will oversee the development of foreign markets.
The board of directors of the new company will have 13 members, comprising the chief executive, two members appointed by IFIM, five appointed by FARE Holding, and the remaining five appointed by INDPAP, ENPALS and Enasarco.