Tauranga based national property funds manager PMG Property Funds Management Limited has announced a 50 per cent equity partnership, through its parent company PMG Holdings Limited, with listed Australian-based investment and funds manager, 360 Capital Active REIT.

The deal is worth up to $17.5 million and PMG Chairman Denis McMahon, who founded the business in 1992, says it has been a deal 12 months in the making.

'I became acutely aware that as much as to grow the business and protect the investors from uncertain times, particularly after the global financial crisis, it really became clear to me that you have to have very robust structures around you to survive that sort of thing. And we did but really to sort of take it to the next level an equity partner would have been a very useful thing to have.”

PMG Chief Executive Officer Scott McKenzie says he is excited by the opportunities the partnership presents PMG's investors and tenants, and the company's five unlisted commercial property funds.

'The partnership will strengthen PMG's proven ability to acquire high-quality New Zealand properties, help us to continue our sustainable growth, and provide greater performance and resilience for our funds and our investors,” says McKenzie. 'For our tenants, it will mean we can continue to be a landlord of choice, ensuring their spaces are fit for purpose now and for their businesses in the future.”

McMahon says that over the years he has he has spoken with numerous parties regarding equity partnership but nothing ever came to fruition. 360 Capital finally presented him with a chance to partner with a company who share his core values.

'When I formed the business, one of my finding principles was quite a simple one. If it was good for investors then it would be good for me as the manager. Simple as that.

'The second one was to co-invest with my investors so that I had skin in the game and I wasn't just sitting there wearing just a manager's hat, if you like. I was actually looking at it from the investor's perspective as well.

'I think as we went through the journey with the guys from 360 we realized that there were a lot of similarities in terms of values.”

360 Capital's Head of Real Assets James Storey says the company is excited about partnering with PMG.

'Like PMG, we are a high conviction investor, focused on long-term sustainable returns for investors,” says Storey. 'As an equity partner, we will bring further opportunities and add value through our many years of investment and governance experience to PMG's already strong funds management business.”

Whilst some may have reservations regarding the New Zealand company branching out across the Tasman, McMahon is keen to point out the Kiwi link within 360 Capital, whose own managing director Tony Pitt is a New Zealander.

'If you're wanting to be in business and expand it's a fact of life, at some point, you're going to look to further fields,” says McMahon. 'Logically, Australia for us, it's in our backyard. There's a lot of similarities there.

'The founder is a Kiwi, which is a great story in itself and he and I guess we shared a lot of similarities. You know we started something on our own and basically built it up over a long period of time. So I think there was a lot of synchronicity in terms of how we look at and value things. I think that was important.”

PMG's existing management team, brand and staff structure will remain the same. All day-to-day operating and management decisions will continue to be made by the existing PMG executive and investment management team.

An additional independent director and three members of the 360 Capital team will join the PMG Board, adding to PMG's property funds management experience and growing governance capability.