UK property giants merge to create €5b fund

In a significant move in the UK property market, the Federated Hermes Property Unit Trust (FHPUT) has merged with the L&G Managed Property Fund (MPF). 

L&G

This landmark transaction, driven by the best interests of investors, will see a large portion of FHPUT's unitholders transferred to MPF, which will acquire FHPUT's real estate holdings. 
The resulting enlarged MPF, valued at £4.7 bn (€5.4 bn), combines two of the UK's oldest property funds. This merger aims to enhance scale, liquidity, and long-term performance for all investors. 
The merger was overwhelmingly approved by FHPUT unitholders, demonstrating strong support for the move and confidence in the MPF's future direction. 
Mark Russell, CIO for Federated Hermes Real Estate, stated: “As the market has evolved, the needs of our clients have likewise changed and, we therefore sought this merger to provide the best options possible for them. This outcome follows months of detailed and thoughtful planning, undertaken in close consultation with FHPUT’s unitholders. Our goal throughout has been to deliver a solution for our investors that offers continued market exposure to the majority, where feasible, while enhancing both stability and liquidity over the long term.”
Michael Barrie, head of Real Estate, UK & Europe, L&G, commented: “Bringing together two of the UK’s most established property funds in the UK is a significant step in our strategy to strengthen our market position. It reinforces the collaborative approach that underpins L&G’s private market platform growth, our credibility as the partner of choice for consolidation opportunities and our abilities to execute innovative solutions. Through combining deep sector expertise with strong partnerships, we will continue to seek resilient, long-term value for investors.”
Rob Codling, head of Commercial Funds - Real Estate Equity, L&G, added: “The MPF has been very acquisitive over the last 18 months, and this merger will continue to expand and strengthen our property portfolio. The assets complement existing holdings, and we expect the combined portfolios to drive strong returns for all investors.”