Real estate investment trust Charter Hall (ASX:CHC) has purchased a 50 per cent interest in Paradice Investment Management (PIM) for $207 million, in a bid to expand its listed real estate equities into broader equities.
The acquisition price represents a net profit after tax multiple of 10 times, equating to 2.3 per cent of PIM’s funds under management (FUM). Charter has the option to acquire the remaining 50 per cent of PIM at the commencement of FY25.
The company said the acquisition expands their existing investment offerings, introducing investment options not directly correlated with real estate.
“This partnership represents a rare opportunity to invest in a large scale, high-quality listed equities fund manager with $18.2 billion of FUM and a 20-year track record, building upon and significantly expanding our existing listed real estate equities business,” said Charter Hall CEO David Harrison.
“It diversifies Charter Hall’s FUM and earnings streams, introduces new client relationships to both businesses across wholesale and retail equity source segments.”
PIM is a fund maneger with $18.2 billion in FUM. Charter Hall said the investment expands their $61.3 billion funds management platform. Consideration will be provided to PIM shareholders in the form of Charter Hall securities (70 per cent) and a cash component (30 per cent).
Charter reaffirmed operating earnings guidance for FY22 of no less than 105 cents per security.
Shares in Charter Hall (ASX:CHC) are trading 6.7 per cent lower at $20.17.