Stanhope And Norges Go Hunting As Sovereign Fund Pivots Strategy

UK developer and asset manager Stanhope has won a mandate to manage a £4B portfolio of London and Paris office assets on behalf of Norges Bank Investment Management, the world’s largest sovereign wealth fund. 

The companies will also partner up to look for new acquisitions in the two cities, as well as try to boost returns on the existing assets. 

The tie-up is part of a strategic shift by Norges, the $2T fund that manages revenue from Norway’s oil assets. It is stepping away from in-house management of its directly owned assets and is instead outsourcing to sector specialists to optimise returns.

Under new Head of Real Estate Alex Knapp, Norges has been moving to a more indirect investment approach, investing in funds and backing platforms to combat what it sees as underperformance in the sector.

In London, it has previously teamed up with The Crown Estate, Grosvenor and Shaftesbury and bought into those companies’ portfolios. In industrial, it has tied up with Prologis. 

Stanhope will now manage assets like 60 Holborn Viaduct in Midtown and the Fruit and Wool Exchange and the Merrill Lynch Financial Centre in the City. 

In Paris, it will manage buildings like 6-8 Boulevarde Haussmann. Stanhope has opened a new Paris office as part of the mandate and hired two senior professionals in the French capital, it said. 

All told, the Norges portfolio managed by Stanhope will total 2.4M SF and comprise six standing assets and three refurbishment or redevelopment plays. 

The mandate takes Stanhope’s assets under management to £8B, with other partners including Mitsui Fudosan, for whom it is building the £1.1B extension to the British Library in King’s Cross. 

“It creates a strategic alliance with the largest sovereign wealth fund in the world, increases our assets under management to over £8B and enables our entry into the Parisian office market which has many of the same structural and market attributes as the London market,” Stanhope CEO David Camp said of the tie-up in an emailed statement.