Mitsubishi Estate Buying Majority Stake in European Fund Manager Patron Capital

Mitsubishi Estate Co has agreed to acquire a majority stake in European fund manager Patron Capital, with the Japanese property giant also committing €600 million ($696 million) in equity to the London-based firm’s investment vehicles.

MEC is making the investments through its Mitsubishi Estate Global Partners business, Patron said Thursday in a release. The deal, which remains subject to regulatory approval, is part of a long-term strategic growth plan for Patron, which manages €5.3 billion in capital across its funds and related co-investments.

Patron founder and managing director Keith Breslauer and a team of senior partners will continue to lead the business for the long term, retaining a significant minority equity stake. The news comes after the firm in May closed its seventh pan-European property fund, having raised more than €970 million for the vehicle.

“This significant investment from MEC, particularly as a leading property investor and developer, is a strong endorsement of our success and is the next step in our predefined growth plan to take the business to the next level and position it for sustainable, long-term growth,” said Breslauer, a former executive vice president at defunct investment bank Lehman Brothers.

Broader Investor Pool

Patron said MEC’s investment would provide the firm with access to a broader pool of backers through Mitsubishi Estate Global Partners, the Tokyo-based group’s overseas investment management platform, which in turn is keen to explore opportunities in Europe’s private real estate markets.

Patron’s current and previous funds, backed by pension funds, endowments, foundations and family offices, target distressed and undervalued investments across Western Europe, according to the firm.

Breslauer noted that the 130-year-old MEC’s values align with Patron’s long-term vision and commitment to positive social impact.

“We are excited to work with MEC following this investment that will accelerate our growth and deliver significant benefits to our staff and investors,” he said.

Growing Presence

The deal is set to extend MEC’s European reach after the group announced in April that it had begun construction of two wholly owned London office projects with a combined development cost of JPY 248 billion ($1.7 billion).

The projects involve the redevelopment of the former ITV head office and studios on London’s Southbank for JPY 160 billion and the large-scale renovation of MEC’s already-owned building at 1 Victoria Street in Westminster for JPY 88 billion.

That notice came less than a month after MEC revealed its participation in a planned 8,110 square metre logistics campus in southeast London, with the group having acquired and developed 24 buildings in Britain and continental Europe since entering the European market in 1985.