Growthpoint Properties Australia will acquire the Fortius Funds Management business in a $45m transaction which will add $1.9bn of funds under management to Growthpoint.
Timothy Collyer, Managing Director of Growthpoint, said, “We are pleased to announce the acquisition of Fortius today and the establishment of a funds management business which has been a key strategic priority for the Group. Fortius is a best-in-class fund manager with an over thirty year track record of generating an average IRR of 17% per annum for its investors, a mix of high quality institutional investors, high net worth and wholesale investors. Investing in Fortius adds $1.9 billion high quality FUM in a single transaction taking the Group’s assets under management (AUM) to $7.2 billion. We intend to grow the funds management business, targeting 10-20% of Group EBIT over the medium term, delivering incremental growth to earnings and income stream diversification for our securityholders.”
Fortius is one of Australia’s leading family-owned private real estate funds management businesses with an established track record of investing in Australian real estate markets and generating strong returns for its investors.
The transaction delivers on a strategic growth opportunity for the Growthpoint Group, adding $1.9 billion third party funds under management (FUM) to Growthpoint and bringing total assets under management to $7.2 billion.
In addition to the $45m acquisition price a further $10m will be paid based on a earnout provisions relating to agreed milestone of revenue growth from other opportunities which Fortius have secured.
Fortius will also be entitled to 100% of any Performance fees for existing funds received by the Group as an additional purchase price adjustment.
Completion of the deal is anticipated 1Q FY23, subject to satisfaction of conditions precedent including certain change of control consents being received
Fortius management, Ray and Sam Sproats said “Joining with Growthpoint is an ideal outcome for Fortius and our stakeholders as it provides the best path to grow with our investors’ aspirations as well as provide opportunities for our talented investment team. We are enthused by the complementary fit of an active funds manager with a leading office and industrial REIT.” Ray Sproats concluded, “The Fortius team and I are excited by the capital support for growth initiatives as well as the continuation of services for our investors. I can think of no better way to build on our thirty years of successful investing.”
Growthpoint appointed MA Moelis Australia Advisory Pty Ltd as exclusive financial advisor to the Transaction and Gilbert + Tobin as legal advisor. SW Accountants & Advisors acted as tax advisors.