Cornerstone Buys UK's Protego

LONDON-Massachusetts Mutual Life Insurance is entering European direct property by acquiring London-based Protego Real Estate Investors. The acquisition will be made by the US group’s property manager Cornerstone Real Estate Advisers, and is designed to channel cross-border property capital both ways across the Atlantic.

Cornerstone will also integrate MassMutual commercial mortgage lending unit Real Estate Finance Group of Babson Capital Management, effective 1Q10. The combined group will become a unit of Babson Capital Management, and will manage some $30 billion of real estate assets–ranking it as one of the largest global property managers globally. Established in April 2004 by Iain Reid, Charles Weeks and Hugo Llewelyn, Protego manages some $2.5 billion of assets in the UK, Sweden, Finland and Germany, and will retain its own brand. It has 30 staff in UK and continental Europe and, in March 2006 and September 2007, opened offices in Netherlands and Sweden, respectively.

Reid, Protego CEO, told PIE that MassMutual already has an office in Amsterdam, covering Europe for its global securities (REITs) investment management, headquartered in Stamford. “The timing of this transaction is ideal from all parties’ perspective as we plan a conduit for two-way transatlantic capital flows between the US and Europe,” he said. Protego and Cornerstone are complementary in investment philosophy, business structure, strategy and cultural ethos.

Added Weeks, Protego Head of Business Development: “From a business development perspective significant opportunities arise from the combined operations. We now cover all segments of the market…This will be extended by Protego’s activities in property derivatives and structured products.” Llewelyn, Head of Investment, commented: “The continuity of Protego’s investment style and processes, together with the high levels of service…are key to the success of this transaction.”

Cornerstone, established in 1994, is primarily active in core and value-added investment and in public real estate across all types in the US. “The acquisition of Protego provides a substantial and established European platform with an exceptional institutional client base from the UK as well as continental Europe,” it said. Protego, “will provide further expansion opportunities in Europe and also a conduit for US capital investing into Europe and likewise for European capital investing into the US.”