Legal & General Group forms venture to invest in life science, tech real estate (LGGNY)

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A unit of Legal & General Group (OTCPK:LGGNY) (OTCPK:LGGNF) is forming a 50-50 partnership with closely held US-based real estate developer Ancora to create a real estate platform focused on investing in life science, research, and technology growth in the US

Legal & General Capital (“LGC”) will invest an initial $500M of seed capital to form the new company, Ancora L&G, that will focus on emerging regional markets in the US

Ancora will be capitalized by LGC to deliver $4B (£3.2B) of existing pipeline and planned acquisition and development activity over the next five years. LGC is seeking third-party co-investment partners to accelerate scaling the portfolio.

As with other LGC investments, LGC aims to finance longer term cash flows and use them to back Legal & General’s (OTCPK:LGGNY) annuity business.

Legal & General Group (OTCPK:LGGNY) currently manages more than $1.8T of assets globally and is increasing its presence in the US for both equity and debt vehicles.

“While the US is the world’s largest commercial real estate market, the lab real estate market in particular is one of the smallest sectors among other commercial US asset classes,” said Legal & General (OTCPK:LGGNY) CEO Sir Nigel Wilson. “This lack of scale creates high barriers to entry for investors and has made it particularly challenging for tenants to grow due to scarcity of supply.” He said LGC’s ability to access the opportunity through Ancora “will set it apart from other sources of institutional capital seeking to participate in the market.”

Last year, Blackstone’s (BX) BioMed Realty sad it plans to double the size of its life sciences real estate portfolio in Cambridge, UK to meet growing demand for space.