Charter Hall in pole position to acquire Hastings

The leading Australian property group looks at expanding its real asset capabilities with the potential acquisition of the A$14bn infrastructure fund manager.

Charter Hall has entered into exclusive discussions with Australian bank Westpac to acquire its Melbourne-based infrastructure investment fund management arm, Hastings Funds Management.

The listed developer and investment fund manager, Charter Hall, said in an Australia stock exchange announcement that the proposed sale provides an attractive expansion opportunity across real assets funds management. 

Charter Hall and Hastings were unable to respond to a request for comment by press time. The proposed sale remains subject to completion of due diligence, regulatory and board approvals.

Hastings is a global infrastructure real assets business which has operated for more than 22 years, headquartered in Australia with offices in Melbourne, Sydney, London, New York and Asia. Hastings currently has funds under management of around A$14.3 billion ($11.3 billion; €9.7 billion) managed by approximately 100 professionals.

Charter Hall has A$19 billion of real estate funds under management across the office, retail and industrial sectors. The group has offices in Sydney, Melbourne, Brisbane, Adelaide and Perth.

The firm has been growing its funds under management and has so far purchased a 24.89-hectare site from Coca Cola Amatil on a 20-year sale and lease-back arrangement for A$156 million, a Sydney office building for A$229 million from Dexus Property Group and a A$179.4 million stake in a portfolio of cold storage facilities across Australia.

Westpac bought into Hastings in 2002, paying A$36 million at the time for a 51 percent stake. The Australian lender then had hoped to sell the infrastructure fund manager for about A$500 million early last year. 

However, despite garnering interest from TIAA-CREF and MassMutual Financial Group, two US asset managers, Westpac suspended the sales process in March 2016. 

“For various reasons, including current external market conditions, Westpac and the relevant parties have elected to cease strategic conversations and due diligence with respect to a possible purchase of Hastings,” the lender said in a statement at the time. 

The Australian fund manager has seen several senior staff departures over the past two years. Peter Taylor, an industry veteran who left Hastings in January 2016 after 16 years at the firm, resurfaced this January as co-head of infrastructure at The Carlyle Group. Rob Collins, formerly Hastings’ head of global investments for North America and Europe, joined 3i this March. Three executives also left the firm after fundraising for a core European vehicle was suspended last summer.