HENDERSON Group Plc and TIAA-CREF, the manager of investments for employees of nonprofit institutions, agreed to combine their European and Asian real estate businesses to form a venture with 13 billion pounds (US$20 billion) of assets under management.

TIAA Henderson Global Real Estate will buy and manage commercial and multifamily residential real estate, the companies said in a statement yesterday. In a related deal, New York-based TIAA-CREF agreed to buy Henderson's North American property business.

"There are compelling growth opportunities in global real estate," Tom Garbutt, head of TIAA-CREF global real estate, said in the statement. "This new venture will leverage TIAA- CREF's financial strength and long-standing real estate investment capabilities together with Henderson's expertise and wide array of real estate investments in Europe and Asia Pacific."

Asset managers including Henderson and BlackRock Inc are buying or merging property-advisory firms as their investors seek to diversify beyond stock and bond funds. The resulting increase in scale helps attract sellers of assets and gives them an advantage over other bidders because they are more likely to complete deals, Henderson Group CEO Andrew Formica said yesterday.

The venture will invest US$1.5 billion in cash from TIAA-CREF "over the next few years" in real estate deals, Formica said. The new firm will also open a business in commercial real estate debt, including co-investment from TIAA-CREF.