LONDON (ShareCast) - Plans to tie up F&C Asset Management’s property business with property asset manager REIT will create a UK-owned property asset manager with £8.5bn assets under management.

Its UK and Ireland operations will combine with REIT, owned by entrepreneurs Leo Noé and Ivor Smith and which manages an international property portfolio worth over £3.5bn.

Fund manager F&C, 52% owned by insurer Friends Provident, said Tuesday it will be the majority owners of F&C REIT Asset Management with a 70% stake.

As part of the deal, F&C will pay Noé and Smith £25m in cash and £35m in loan notes and their ownership rights may increase to 40% by the end of 2014 if the business hits EBITDA performance targets.

Noé will be executive chairman of F&C REIT and Smith an executive member, while F&C’s Nick Criticos becomes chief executive.

They expect the deal to be earnings enhancing for the first full year after completion.

“This transaction is consistent with the development of our multi-specialist business model and the strategic direction of our three year plan,” said F&C boss Alain Grisay.

“It will increase our geographic scope, widen our product range and deepen our expertise in property asset management which is a core long term asset class for our clients.”

• News Channel