Top notch investment firms including New York based Blackstone Group LP, Apollo Investment Management LP are on the race to buy stake in Bank of America Merrill Lynch Asian real estate investment business. The bid which also includes the $4 billion Merrill Lynch Asian Real Estate Opportunity Fund is expected to close before the end of this year, adds the report.
Also in the race are companies like Sumitomo Mitsui Banking Corp, part of Japan based Sumitomo Mitsui Financial Corp and New Delhi based private-equity firm Red Fort Capital Advisors Pvt Ltd.
The report suugests that talks are at an early stage. Bank of America made the decision to sell the management of the Asian real-estate businesses due to the global market meltdown and after the US government’s stress tests earlier in the year. Experts say that the decision has been enhanced after Timothy J Grady, who was managing the fund, parted the company in March this year.
According to the report, the fund, which closed in October after raising $2.65 billion, is currently headed by Martin Seol, formerly the fund’s chief administrative officer. Total assets in debt and equity equal about $4 billion and the fund employs 60 professionals in Asia.
Merrill invested $700 million of the $2.65 billion raised by the fund and isn’t seeking to sell its stake. Most of the fund, which is fully invested, has been invested in South Korea, Japan, China and India.
In a letter to investors in May, Merrill Lynch said that it had made a decision to transfer management of the Asia real-estate fund to ‘a recognized asset manager’ but it would ‘continue to own a substantial stake in its limited partnership interest and would stay committed and aligned with the interest of the fund.’
Merrill Lynch has been investing in the Indian realestate for quite some time now. It has invested Rs 1,481 crore or $377 million in its seven housing projects. Merrill Lynch had also picked up stake in BPTP’s IT Park in Gurgaon for Rs 112 crore.
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