National Australia Bank’s (ASX: NAB) direct asset management business, nabInvest, has acquired a 35 per cent interest in AREA Property Partners (AREA), a global real estate fund manager based in New York.

The company said the acquisition is in keeping with NAB’s stated wealth management strategy, a part of which is to expand its participation in direct asset management through partnerships with selected, quality fund managers. It continues to build out nabInvest’s portfolio and is the third investment nabInvest has made in an overseas fund manager since the business was established in October 2007.

Garry Mulcahy, Executive General Manager of Asset Management at MLC & NAB Wealth said: “The strategic partnership with AREA builds on our acquisition of global REIT manager Presima Inc. and expands our participation in the global real estate sector.

“Real estate as an asset class continues to attract investor attention and, with limited growth of investment-grade real estate in Australia, increased demand will require offshore investment. nabInvest has sought to position itself with business partners that are able to meet investors’ needs in this sector, initially in global REITs, and now in direct real estate.

“We believe AREA is a great fit for NAB given its expertise, scale and proven track record selecting and managing property investments in North America, Europe and Asia.”

AREA was founded in 1993 and has overseen the establishment of multiple real estate funds and joint ventures totalling US$13 billion in equity commitments for institutional investors. Its funds have invested in over 500 transactions with an aggregated value in excess of US$60 billion.

AREA’s management team remains unchanged and the business will continue to be led by Chairman William Mack and Global CEO Lee Neibart. The remaining 65 per cent of AREA’s equity will be owned by key AREA employees and investment professionals. Three NAB representatives will also join AREA’s eight member Board.

NAB’s consideration for its equity stake will remain in the business, with the majority used to co-invest with investors in existing and new AREA funds. The terms of the agreement were nit disclosed.