A consortium comprising Starwood Capital Group and Warburg Pincus is reportedly nearing an agreement to privatise ESR Group, a Hong Kong-listed real estate fund manager valued at over $7 billion. According to ESR, the consortium also includes the company’s founders and a subsidiary of the Qatar Investment Authority, a sovereign wealth fund.
While representatives of the consortium and Warburg Pincus have declined to comment, ESR has not responded to inquiries. Sources familiar with the matter revealed that Warburg Pincus, which holds a 14% stake in ESR and is the company’s largest shareholder, intends to retain its stake in the newly privatised entity rather than sell it off.
Details of the transaction, including the final offer price, remain subject to change. ESR had disclosed in May that it received an initial privatisation proposal from a consortium led by Starwood Capital Group, Sixth Street Partners, and SSW Partners.
The move follows a sharp decline in ESR’s stock price over the past two years, largely attributed to challenges in China’s real estate market. The stock has dropped over 60% from its 2021 peak, significantly outpacing the roughly 33% decline in the Hang Seng Index during the same timeframe.
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ESR specialises in managing real estate-focused funds in addition to its property investments. The company went public in 2019, raising $1.6 billion through an IPO priced at HK$16.8 per share.
