Goldman Sachs has agreed to acquire real estate investment manager LCN Capital Partners for up to $410 million, the bank said Tuesday.
The transaction, set to close by the end of the year, marks the second deal worth nine figures or more that Goldman has announced in the past week. The bank last Wednesday said it would buy exchange-traded fund provider NEOS for $2.25 billion.
“LCN’s differentiated platform is highly attractive for our Asset & Wealth Management clients who want diversified sources of returns and offers corporate clients innovative capital solutions,” Goldman CEO David Solomon said Tuesday in a statement. “Their focus complements our private real estate team’s broad 30-year track record and will expand our ability to serve our insurance, institutional, and wealth client segments.”
LCN originates, negotiates, invests in and manages sale-leaseback, build-to-suit and net lease investments across North America and Europe. Goldman and LCN tout those capital segments as “predictable, inflation-protected and tax-advantaged” opportunities worth trillions of dollars.
LCN counted roughly $3 billion in assets under supervision as of June 30 – mostly from institutions, insurers and high-net-worth individuals. LCN’s investment funds have carried an average annual net cash-on-cash return of 10.8% since 2011, the company said.
“Our team, our strategy, and our commitment to our partners, both capital and corporate, remain unchanged — what changes is the scale of our ambition,” LCN’s co-founder, Edward LaPuma, said Tuesday. “By combining LCN’s origination network and investment discipline with Goldman Sachs’ unrivaled corporate relationships, global distribution, and client experience teams, we can better serve our investing and tenant partners at a scale no independent firm could match.”
LaPuma and fellow LCN co-founder Bryan York Colwell will join Goldman Sachs Asset Management’s real estate business, along with the rest of LCN’s team, once the transaction closes.
The deal’s value is divided between an upfront consideration of roughly $260 million and a deferred portion, worth up to $150 million, that’s contingent on achieving certain long-dated performance targets and service commitments. Roughly 80% of the total consideration is payable in equity, the companies said.
