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UK-based Forum Partners views its tie-up with French asset manager La Francaise as a ‘transformational’ move, Forum’s CEO Russell Platt told PropertyEU in an interview.

‘La Francaise has enormous expertise and is a leader in third-party asset management and senior debt in its home market. They already have 25% of their assets outside France, but what they needed was a credible bridge to the rest of Europe. We are thrilled that we passed the selection process. Together we can offer a true global platform in terms of products and distribution,’ Platt said.

Earlier this week, La Française, a subsidiary of French bank Crédit Mutuel Nord Europe with €37 bn of assets under management, announced it had taken a 25% stake in the property investment specialist. Under the alliance, the partners will collaborate on a series of new European investment products, including a joint venture to develop European direct real estate products and a debt platform.

To support the partnership, La Française and its parent company CMNE will allocate over $600 mln in capital across each of Forum’s principal investment strategies, beginning with over $200 mln to Forum’s European debt platform, including mezzanine and senior debt.

The combination is ideal, Platt said. ‘The mezz space and the use of an equity kicker is a natural sweet spot for us and bringing senior debt to the table can make the difference in terms of offering an integrated solution. But we didn’t have the resources to do it and wouldn’t think of launching senior debt and direct real estate products and strategies on our own.’

The negotiations on the strategic partnership commenced in April after an adviser hired by La Francaise drew up a shortlist of relevant investment managers with broader exposure than the French market and ended up knocking on Forum Partners’ door. La Francaise and its parent CMNE service thousands of retail investors in France but also have a strong institutional network and were keen to broaden their exposure outside their home market. 'We are already very large in French property, but want to have more of an international presence as well,' president Xavier Lepine commented. 'We look forward to providing clients a complete and original range of real estate products and anticipate Forum will be a significant contributor to our international development.'

The collaboration extends beyond Europe to Asia and to Forum’s securities business, Platt said. ‘We have been quite active in Asia for a few years now and also aim to get a foothold in North America where we are looking for a team with asset management capability on the ground.’ He added that in Europe, the UK, Germany and Benelux were ‘obvious choices ‘ in terms of countries that the joint venture will likely target first.

Platt conceded that the partnership was ‘pretty ambitious’ in terms of scale, speed and scope, but said he was confident it would work thanks to the philosophy and culture specific to the French organisation. ‘They are looking for best-in-class product which suited us perfectly. In hindsight this partnership is tailored to what we wanted.’

The negotiations proceeded remarkably easily, Platt added. ‘There’s always a level of complexity in this type of arrangement and you need to provide some protections for the minority shareholder. They don’t want to run the day-to-day business and we would like to remain a level of independence. There are a lot of moving pieces in this collaboration, but it fits well. The negotiations proceeded very quickly - and that over the summer period! We took that as a sign that things would go well (during the actual partnership).’

He described the Paris-based company as a ‘remarkable organisation’ and ‘extraordinarily entrepreneurial’ with a history of supporting start-ups or businesses with a level of maturity through substantial minority investments. ‘I have been asked whether I would have been interested in a capital injection into Forum alone and I said no. Capital is a very powerful tool, but it’s particularly powerful when you can add special resources and add the venture element. Ventures of one sort or another are as old as commerce itself, but I think this one is fairly unique. For both of us this is a comprehensive platform and a game changer.’

Founded by American-born Platt, Forum Partners is an independent global real estate investment management firm with €4.2 bn of capital committed and under advice. La Française has €6.7 bn of real estate assets under management.