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CBRE Group (CBG) Completes Majority Stake Buyout in Caledon

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CBRE Group Inc. recently completed the acquisition of majority stake in Toronto-based infrastructure and private equity solutions provider – Caledon Capital Management Inc. – for an undisclosed amount. The move complements the CBRE Global Investors’ service offerings, enhancing the set of infrastructure investment programs.

Notably, investors are increasingly eyeing alternative investments, including real estate. Further, infrastructure is a strategic constituent of real estate allocations. As such, client demand is likely to shoot up for such programs and hence the Caledon acquisition seems a strategic fit for the commercial real estate services and investment firm CBRE.

Caledon will now be known as CBRE Caledon Capital Management Inc. (CBRE Caledon). It will function as a separate business unit within the company’s independently-operated investment management subsidiary – CBRE Global Investors. The business will continue to be managed by the Caledon management team.

The acquired entity manages around US$7 billion (over CA$9 billion) of assets for institutional investors. It combines direct investments, consulting assignments, co-investments, secondary investments, and primary fund investments to meet the unique investment requirements of the clients. The private infrastructure and private equity investments of CBRE Caledon denote a solid addition to the collection of investment solutions offered by CBRE Global Investors and its listed equity arm, CBRE Clarion Securities.

As a matter of fact, strategic in-fill acquisitions have played a vital role in widening CBRE’s geographic coverage, as well as expanding and reinforcing its service offerings. Furthermore, the company opts for larger, transformational deals driven by macro policies. In fact, it has completed over 110 acquisitions since 2003, including five large, strategic acquisitions.

As market conditions continue to improve, we believe that these opportunistic acquisitions and strategic investments will likely serve as growth drivers, supplementing the company’s organic growth.

CBRE currently sports a Zacks Rank Zacks Rank #1 (Strong Buy). The stock has risen 17.1% year to date compared with 10.7% growth recorded by its industry.



Other Stock Picks

Investors interested in the real estate operations industry may consider stocks like FirstService Corporation (FSV - Free Report) , Henderson Land Development Company Limited (HLDCY - Free Report) and LSL Property Services Plc (LSLPF - Free Report) . While FirstService Corporation sports a Zacks #1 Rank, Henderson Land Development Company and LSL Property Services carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FirstService Corporation’s 2017 earnings moved up 9.3% to $1.41, over the past 30 days.

For Henderson Land Development Company, the Zacks Consensus Estimate for 2017 remained unchanged at 44 cents, over the past seven days.

In addition, the Zacks Consensus Estimate for LSL Property Services 2017 earnings climbed 13.8% to 33 cents, over the past 30 days.

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