KKR to Acquire Leading Japanese Real Estate Asset Manager from Mitsubishi Corporation and UBS Asset Management in a Strategic TransactionMarch 17, 2022
- New strategic transaction combines the real estate investment and asset management acumen of KKR and MC-UBSR to strengthen a leading Japanese REIT management business
- Strong alignment of interest through KKR’s direct investments in MC-UBSR’s listed J-REITs
Acquisition deepens KKR’s presence in
Japanand expands its US$41 billionglobal real estate business to US$55 billion1
Concludes two decades of successful joint venture for Mitsubishi and UBS Asset Management
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MC-UBSR is one of the largest real estate asset managers in
JMF, with approximately
Commenting on the transaction,
“Japan is one of the most important and high-volume real estate markets in the world, and is a market we have been dedicated to investing in with a local team since 2006. MC-UBSR has an excellent track record of serving investors across its REIT offerings and a strong commitment to enhancing its investments through a strategic approach to ESG. We look forward to working with and supporting a team that has served investors so well over the last two decades, and we anticipate that our combined strengths will further enhance MC-UBSR’s ability to deliver for new and existing clients and unitholders,” said
UBS’s asset management, wealth management, and investment banking businesses operating in
- KKR is committed to supporting the existing strategy and continuity of MC-UBSR and looks to leverage its network and global resources to create value for JMF and IIF unitholders. The strategic transaction combines the real estate investment and asset management acumen of both KKR and MC-UBSR, and is expected to bolster the acquired operation’s status as a leading J-REIT business with enhanced opportunities for organic and inorganic growth.
Acquisition of the asset manager deepens KKR’s commitment to
Japan, where KKR has had a local presence and team since 2006. The transaction also provides KKR’s global real estate business – which manages US$41 billionin client assets as of December 31, 2021– with immediate scale in a large, important market.
Creates strong strategic synergies between MC-UBSR’ dedicated team of real estate professionals in
Japanand KKR’s 135-person global real estate team. Today, in addition to its institutional investment funds, KKR invests on behalf of individual investors through listed and privately offered REITs, including KREF, a publicly listed REIT that focuses on originating senior commercial mortgage loans, and KREST, a REIT that thematically invests in income-oriented commercial real estate equity and debt primarily in the U.S.
Key Transaction Terms
76KK, a subsidiary of KKR, to acquire all of the outstanding shares of MC-UBSR in an all-cash transaction valued at
JPY230 billion( US$2 billion).
- 76KK will also acquire the units in JMF and IIF currently held by Mitsubishi at market price, thereby strengthening the alignment of interest between KKR and the unitholders of JMF and IIF.
MC-UBSR’s existing experienced management team of professionals is expected to remain in place and continue to manage JMF and IIF. KKR intends to work closely with the existing team to integrate the business with KKR’s
US$41 billionreal estate business.
- The investment will be held on KKR’s balance sheet, not in any client funds.
- The transaction is expected to be immediately accretive to KKR on a Fee Related Earnings per share basis.
The transaction is expected to close in
April 2022and is subject to required regulatory approvals and certain other customary closing conditions.
KKR, MC-UBSR, Mitsubishi and
UBShave published additional information for shareholders on their websites, www.ir.KKR.com, www.mc-ubs.com, www.mitsubishicorp.com and www.ubs.com, respectively.
Simpson Thacher & Bartlett LLPand Nagashima Ohno & Tsunematsuserved as legal advisers to KKRand Sumitomo Mitsui Banking Corporationserved as financial adviser to KKR.
UBS Investment Bankacted as exclusive financial advisor to Mitsubishi, UBS-AMand MC-UBSR. Nishimura & Asahi served as legal advisers to Mitsubishi. Mori Hamada& Matsumoto served as legal advisers to UBS-AM. Anderson Mori& Tomotsune served as legal advisers to MC-UBSR.
Forward Looking Statements
This press release contains certain forward-looking statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believe,” “think,” “expect,” “potential,” “continue,” “may,” “should,” “seek,” “approximately,” “predict,” “intend,” “will,” “plan,” “estimate,” “anticipate,” the negative version of these words, other comparable words or other statements that do not relate strictly to historical or factual matters. Forward-looking statements relate to expectations, estimates, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, including but not limited to the statements with respect to: the Acquisition; operation of the acquired business following the closing of the transaction; expansion and growth opportunities and other synergies resulting from the transaction; the transaction’s effects on KKR’s AUM, book value, fee related earnings, after-tax distributable earnings per adjusted share and other measures and performance metrics and the timing of such effects; and expected timing of closing of the Acquisition. The forward-looking statements are based on KKR’s beliefs, assumptions and expectations, taking into account all information currently available to it. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to KKR or are within its control. If a change occurs, KKR’s business, financial condition, liquidity and results of operations may vary materially from those expressed in the forward-looking statements. The following factors, among others, could cause actual results to vary from the forward-looking statements: failure to realize the anticipated benefits within the expected timeframes from the Acquisition; unforeseen liabilities or integration and other costs of the Acquisition and timing related thereto; availability and cost of financing to fund the Acquisition; changes in MC-UBSR business; any delays or difficulties in receiving regulatory approvals; failure to complete the transaction; distraction of management or other diversion of resources within each company caused by the transaction; retention of key MC-UBSR employees; the acquired business’s ability to maintain business relationships following the Acquisition; the severity and duration of the COVID-19 pandemic; the pandemic’s impact on the
These statements are subject to numerous risks, uncertainties and assumptions, including those described under the section entitled “Risk Factors” in
All forward-looking statements speak only as of the date of this press release. KKR does not undertake any obligation to update any forward-looking statements to reflect circumstances or events that occur after the date on which such statements were made except as required by law. Past performance is not indicative or a guarantee of future performance. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of
Mitsubishi Corporation is a global integrated business enterprise that develops and operates businesses together with its offices and subsidiaries in approximately 90 countries and regions worldwide, as well as a global network of around 1,700 group companies.
Mitsubishi has 10 Business Groups that operate across virtually every industry: Natural Gas, Industrial Materials, Petroleum & Chemicals Solution, Mineral Resources, Industrial Infrastructure, Automotive & Mobility, Food Industry, Consumer Industry, Power Solution and
With an unwavering commitment to conducting business with integrity and fairness, Mitsubishi remains fully dedicated to growing its businesses while contributing to a prosperous society.
1 Based on JMF’s total assets of approximately
2 Assets under management in this press release, unless otherwise indicated, are based on the latest appraisal value of JMF’s and IIF’s portfolios.
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