In addition, as part of the overall transactions, ING has also agreed to sell up to approximately $100m of its equity interest in existing ING REIM funds.
ING Group CEO Jan Hommen said with these transactions ING continues to deliver on its strategic objectives of reducing exposure to real estate, simplifying its company and further strengthening its capital base.
ING has entered into an agreement with CB Richard Ellis Group to sell ING REIM Europe, ING REIM Asia and Clarion Real Estate Securities (CRES), ING REIM’s US-based manager of listed real estate securities, as well as part of ING’s equity interests in funds managed by these businesses.
ING REIM Europe, ING REIM Asia and CRES combined have EUR44.7bn in assets under management as of 31 December 2010.
In a separate transaction, ING has agreed to sell the private market real estate investment manager of its US operations, Clarion Partners, to Clarion Partners management in partnership with Lightyear Capital for $100m.
Clarion Partners has EUR16.5bn in assets under management as of 31 December 2010. Lightyear is a US-based private equity firm.
The Real Estate Investment Management business in Australia (ING REIMA), with EUR4.8bn in assets under management as of 31 December 2010, is not included in these transactions.
ING said within the context of the previously announced evaluation, it finalised the review of the strategic options and implementation has commenced.
As a result ING will undertake a phased withdrawal from its Australian real estate investment management activities in a timely and controlled manner.
In the transaction with CB Richard Ellis, ING Insurance has agreed to continue its asset management mandate with CB Richard Ellis as the new manager of the funds.
ING Bank will continue to have an equity interest in some REIM funds in Europe, Asia, the US and Australia.
The equity stakes held by the bank will be monetized over time as it continues to steadily reduce its exposure to real estate.
Combined, the transactions are expected to result in an after-tax gain on disposal of approximately EUR500m at current exchange rates.
ING Real Estate Development and ING Real Estate Finance are not impacted by these transactions and will continue to be part of ING Bank.
Both transactions are expected to close in the second half of 2011, and are subject to approvals by certain stakeholders including various regulators.