Fitch Affirms Savills Fund Management GmbH at 'High Standards'
KEY RATING DRIVERS
The affirmation is driven by the broad stability in SavillsFM's processes and resources, while recognising the change of ownership. The new owner, SavillsIM, is a 100% subsidiary of Savills plc whereas SavillsFM, formerly known as SEB Investment GmbH (SEBi), was previously owned by SEB AG (A+/ Positive/F1). Nonetheless, Savills's revenues and profitability are growing and its balance sheet features a high cash balance combined with extremely low borrowings. Furthermore, Savills, as a real estate specialist, is a strategically aligned owner for SavillsFM's real estate investment management business.
The combined entity will have a materially increased market presence relative to SavillsFM alone. This will mitigate the significant challenge SavillsFM had faced alone from the on-going liquidation of several large funds. SEB ImmoInvest, its largest fund, which represented around 35% of SavillsFM's AUM as of end-June 2015, is being liquidated over a five-year period to May 2017 agreed with regulators. All non-captive German open-ended real estate funds (such as SEB ImmoInvest) have been in liquidation since 2012 or earlier.
SFM's 'High Standards' rating is based on the following assessment in each category covered by Fitch's rating criteria:
SEBi managed around EUR12.2bn of real estate assets and employed around 130 staff based in Frankfurt and Singapore as of end-June 2015. It was sold to SavillsIM by SEB AG, a subsidiary of Skandinaviska Enskilda Banken (A+/Positive/F1).
SIM is the investment management business of the Savills plc, a FTSE 250 listed global real estate services provider. SavillsIM, including the staff and assets of SavillsFM, had around EUR17bn in AUM as of end-September 2015, with a presence in Europe and Asia. The acquisition was announced 19 March 2015, and completed on 1 September 2015.