(LONDON) AXA Real Estate, part of Europe's No. 2 insurer AXA, is mulling over a possible bid for ING's real estate unit as part of an aggressive plan to grow its business at the expense of ailing rivals, a senior executive said.
Chief investment officer Dennis Lopez said AXA Real Estate had managed a torrid downturn in developed property markets 'extremely well' and was looking to leverage its enhanced credibility with investors in opportunistic corporate takeovers.
'We are one of the few firms that actually has the infrastructure to be able to buy the company and make it work,' Mr Lopez told the Reuters Global Real Estate and Infrastructure Summit in London on Tuesday. 'We have all the offices in all the countries. . . We are definitely looking at it.'
Last week, sources familiar with the situation told Reuters that Morgan Stanley had been appointed by the Dutch bancassurer ING to review a possible disposal of ING Real Estate Investment Management (ING Reim), one of the world's largest property asset managers with US$92 billion of assets under management.
ING is under pressure from regulators to offload assets to accelerate the repayment of a 10 billion euro (S$17 billion) rescue loan from the Dutch government at the peak of the European banking crisis.
It is planning to offload its insurance business - the world's sixth largest - via a trade sale or IPO by end-2013.
A successful takeover of ING Reim would triple AXA Real Estate's total assets under management, which currently stand at about 38.4 billion euros globally.
Mr Lopez said AXA had already evaluated possible offers for the real estate units of US bank Citigroup and stricken insurer AIG, which were put on the market at the end of a debt-fuelled property boom.
'If you look at the list of the world's top 50 real estate fund managers and see what their assets under management were in '07 and look at where this is today, most of them will have lost between 15-20 per cent. AXA only lost 7 per cent,' he said.
'There's a huge opportunity for us now because a number of managers have lost a lot of credibility and money. . . It is important for us to fully capitalise on what we've accomplished in the cycle. We'll look at those transactions and if they make sense, we'll see,' he said. -- Reuters
Source: Business Times, 17 Jun 2010