After years of close collaboration in the real estate sector in Italy, Blackstone is acquiring a 35% stake in Kryalos sgr, the real estate fund management company founded in 2013 by Paolo M. Bottelli, who will keep the majority of the capital (see here the press release).
More in detail, Blackstone has signed an agreement to buy 35% of Kryalos Investments srl, the holding company that today controls 100% Kryalos sgr and Kryalos Asset Management.
The transaction is subject to prior approval by the Bank of Italy. The governance of the sgr will remain unchanged and, therefore, Andrea Amadesi will continue to play the role of president and Bottelli will retain the position of managing director. Blackstone has no right of appointment on the board of directors, in the board of statutory auditors or in the management of the company.
The Kryalos group operates in the fund management, asset management and advisory sector with around 5 billion euros AuM, in the offices, retail, logistics and hotel sectors. Kryalos sgr manages 34 real estate funds reserved to professional investors and has 44 employees. In 2018 alone, the company has concluded trades for a total value of 1.2 billion euro on behalf of ten different investors. Kryalos Investments can also co-invest in real estate transactions both at the bottom and single transaction levels.
In the logistic field in Northern Italy. Kryalos Asset Management currently manages and provides advisory services on a portfolio of assets of approximately 1.5 billion euros which includes the Atlantic 1 Fund and multiple retail assets, including the Outlet Village of Palmanova, Franciacorta, Valdichiana, Mantua, Puglia under the unique Land of fashion brand and owned by Blackstone itself. Those outlets are said to have a total value of about 800 million euro, are currently on sale and negotiations are under way with the Asian group Sasseur (see here a previous post by BeBeez).
As for the asset management company, the interests in common with Blackstone are significant. For example, the US giant bought Palazzo Sturzo in Rome for 50 million euro last Autumn, a deal that was carried out through the Thesaurus fund managed by Kryalos sgr, of which Blackstone is the sole subscriber (see here a previous post by BeBeez). Blackstone is also owner in Italy of the former building of Poste Italiane of Milan which hosts the first Starbucks Roastery in Italy. The property is part of the Pacific 1 fund, also managed by Kryalos sgr, which Blackstone has fully subscribed (see here a previous post by BeBeez). And, again through Kryalos sgr, Blackstone sold six small and medium-sized Italian commercial galleries to Partners Group at the beginning of the year: Kryalos has in fact set up the new Dante fund, underwritten entirely by Partners Group that has purchased the six commercial galleries distributed throughout the national territory for a total area of about 79,300 square meters and over 250 units (see here a previous post by BeBeez). In August 2017, Blackstone sold all the shares in the Kensington fund to Allianz, managed by Kryalos sgr and specialized in Milan offices (see here a previous post by BeBeez).
The US giant, which at the end of 2017 boasted 184.3 billion dollars in management, making it the largest real estate manager globally according to Inrev’s 2018 Fund Manager Survey, Anrev and Ncreif (see here a previous post by BeBeez), was recently involved in a legal battle that is expected to be particularly complex in relation to the purchase of Corriere della Sera‘s offices in via Solferino in Milan. Blackstone had bought those assets in 2013 from RCS Media Group for a 120 million euros price through a series of funds, including the Delphine fund managed by Kryalos sgr. Blackstone was in talks advanced since last Summer to sell the complex to the Allianz group for a price that is more than double that paid to RCS (about 250 million), but less than a month ago the deal stopped because Urbano Cairo, meanwhile having taken over RCS Media Group (see other BeBeez article), has asked the Court of Milan for an arbitration to ascertain the nullity of the contract of 2013. Blackstone for its part has filed RCS to the Court of New York (see here the filing to the NY Supreme Court) and if Allianz should cancel the purchase, Blackstone is ready to ask compensatory and punitive damages also for the damage of image suffered.