Guardian Gets Control Over Real Estate Investment Advisory Firm

Guardian Life Insurance Company of America has agreed to increase its stake in a real estate investment management and advisory firm, Lowe Enterprise Investors (LEI).

Guardian has had a 49% stake in LEI since 2010. Lowe Enterprises, a Los Angeles-based real estate developer, controls a 45% stake.

Guardian is planning to increase its equity interest in LEI to 80% and separate LEI from Lowe Enterprises. Guardian hopes to close on the deal by the end of the month.

The price of the deal was not disclosed.

LEI would keep its current staff and offices, and LEI's co-CEOs, Bradford W. Howe and Bleecker P. Seaman III, would continue to lead the firm. Senior managers' share of LEI's stock would increase to 20%, from 6% today.

The business would rebrand as Broadshore Capital Partners.

Howe said in an interview that the deal is a chance for his team to consolidate the advisory firm's ownership with a very strong financial partner that believes in the business, and that has been an owner of the business for eight years.

"This is also a chance for us to continue to grow our team and provide the same level of high service for our clients," Howe said.

The idea of Guardian getting control over the business has always been a real possibility, Howe said.

"As Guardian has gotten to know our team and gotten more comfortable with our team and our strategy, they have come closer to this acquisition," Howe said. "From a management perspective, their involvement in our business is valuable for a number of reasons. They have a great expertise in the financial world, and their capital is important to co-investing alongside our clients in certain cases."

Little about the firm's strategy will change, Howe said.

The firm will continue to focus on multifamily housing, hotels and offices, and managers are looking to continue to grow the business.

Broadshore is looking to expand its footprint in senior housing, Howe added.

Editor's Note: Why This Matters to Annuity Agents

Life insurers use investments in real estate, mortgages, in mortgage-backed securities, and in other types of financial instruments tied to mortgages and real estate, to support annuities and other products that may pay benefits starting far in the future, or for long periods of time.

U.S. life insurers had about 22% of their $4.4 trillion in general account assets invested in real estate, mortgages and mortgage-backed securities in 2017, according to data from the American Council of Life Insurers' ACLI 2018 Life Insurers Fact Book.

— Read Prudential's Real Estate Finance Arm Describes Its Lending Targets, on ThinkAdvisor.

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