Two major US investment firms, Madison International Realty and GCM Grosvenor, have acquired minority ownership stakes in Matter Real Estate, a London-based residential property manager. The transaction is designed to fuel the expansion of Matter, which currently manages approximately €1 billion in assets across the UK and Europe.
Key Takeaways
- US-based Madison International Realty and GCM Grosvenor have purchased minority stakes in Matter Real Estate.
- The investment aims to scale Matter's pan-European residential platform.
- Previous majority stakeholder, Black Lion Group, has partially sold its interest but remains an investor.
- In addition to the stake, Madison has committed new capital to Matter's existing investment funds.
- The deal marks a significant step for both US firms in strengthening their European real estate presence.
Details of the Strategic Partnership
The ownership interests in Matter Real Estate were acquired from the Swiss family office investor, Black Lion Group. While Black Lion has reduced its holding through a partial sale, it will maintain a stake in the company, signaling continued confidence in Matter's growth trajectory. The financial details of the transaction have not been made public.
The management ownership of Matter, a company established in 2021 as a spin-out from ESO Capital, remains unchanged. David Christie, CEO of Matter, commented on the continued involvement of Black Lion's CEO, Alex Schmid, who has been a primary backer since the firm's inception.
"It shows a real vote of confidence, and it facilitates us to introduce well-established international institutional parties around the boardroom table as we look at evolving the strategy for the business going forward," Christie said.
This new structure brings two influential American institutional investors to the table, positioning Matter for its next phase of development in the European residential market.
Background on Matter Real Estate
Founded in 2021, Matter Real Estate specializes in residential property across various sectors. Its portfolio includes single-family and multi-family housing, senior living, and affordable housing. The firm operates on a platform aggregation model, building specialized property platforms in different markets. Currently, its operations are focused on the UK, Germany, Denmark, and Sweden.
GCM Grosvenor Strengthens Its European Commitment
For GCM Grosvenor, a Chicago-based firm with $86 billion in assets under management, this transaction deepens an existing relationship. The firm first partnered with Matter in 2022 by acquiring a stake in Placefirst, Matter’s single-family rental housing developer and operator.
Since that initial investment, GCM Grosvenor has deployed further capital into several of Matter’s funds. These include the value-add vehicle Matter Real Estate Fund II and the opportunistic fund Placefirst SCSp. According to reports, the investment in Matter's management company is the first of its kind for GCM Grosvenor in a European real estate manager.
Bryce Robertson, an executive director at GCM Grosvenor, emphasized the strategic importance of the partnership.
"Our partnership with David and the wider Matter team has been a cornerstone of our commitment to growing our presence in the institutional European real estate market," Robertson stated. "Bringing Madison into the fold only strengthens that position; we’re looking forward to continuing to collectively build a leading pan-European residential player."
GCM Grosvenor at a Glance
- Total AUM: $86 billion
- Real Estate AUM: $7 billion
- Investment Strategy: Alternative assets, including seed investments, joint ventures, co-investments, and fund investments.
Madison International's Strategic Entry
Unlike GCM Grosvenor, New York-based Madison International Realty had no prior investment relationship with Matter. This deal marks the third stake acquisition by Madison’s Real Estate Growth Platform team, which focuses on providing strategic capital to mid-market, vertically integrated real estate firms.
Mo Saraiya, Madison's deputy CIO and head of platform investments, leads this initiative. He highlighted that the investment was capitalized primarily by a global sovereign wealth fund backing the platform. Saraiya noted the appeal of the European market and the residential sector in particular.
"The demand-supply imbalance is really compelling, especially for this attainable housing price point," Saraiya explained, referencing the core of Matter's strategy.
A Vision for Scaling
In addition to acquiring an ownership stake, Madison has also committed an undisclosed amount of capital to Matter’s value-add and opportunistic funds, joining GCM as a key investor in these vehicles. Saraiya, who knew Matter's CEO David Christie from his previous role at GCM Grosvenor, saw the company as being at an ideal stage for investment.
"My strategy is a little bit more at that scaling moment where companies have been able to build proof of concept, ramped up the business, but they need capital to help them scale," Saraiya said. "The vision [for Matter] has always been clear: to be a leading pan-European residential player. And we think we’re well on our way."
Madison International at a Glance
- Total AUM: Approximately $7 billion
- Investment Strategy: Provides liquidity to owners and investors, primarily through secondaries, recapitalizations, and strategic platform investments.
Future Expansion and Market Outlook
With the backing of its new institutional partners, Matter Real Estate is poised for significant growth. CEO David Christie expects most of the firm's expansion to come from building out its existing platforms in the UK, Germany, Denmark, and Sweden.
However, he did not rule out entering new territories. Christie mentioned that the firm is actively assessing opportunities in other European markets, including Spain and Finland, to broaden its geographic footprint.
The company also manages a core fund, the Matter UK Residential Income Fund, which launched in November 2023 with a £105 million commitment from UBS Asset Management. This diverse fund structure, combined with powerful new strategic partners, equips Matter to capitalize on the strong demand for residential assets across Europe.
