US investor agrees to buy out remaining 50% stake from Grove Capital

US investor Fortress Investment Group is set to take control of property outsourcing company Mapeley.

Fortress is poised to buy out Grove Capital LLP, formerly Soros Real Estate Partners, the second shareholder in Mapeley.

Grove Capital and Fortress own 50% each of Mapeley, having increased their stakes from 42.5% last month when they jointly bought the 15% stake held by Jamie Ritblat’s Delancey Estates.

But Grove Capital is now keen to exit Mapeley and an agreement has been reached between the two parties.

Fortress Investment Group, a US-based investment and asset manager, has around $11bn (£5.88bn) of equity capital under management.

Robert Kauffman, who co-founded Fortress in 1998 and runs its European investment operations, is chairman of Mapeley.

Fortress is a private equity-style operator and, as such, is likely to bulk up Mapeley before selling it to another party or floating it on the stock market.

Grove Capital is owned and managed by Richard Mully and Richard Georgi. It was spun off from the main Soros business earlier this year to allow Soros to focus on its core activity of hedge fund management.

Mully and Georgi continue to run the $1bn (£534m) Soros Real Estate Investors Fund, which was set up in 2001, and are thought to be planning the launch of a second fund.

All parties declined to comment on the deal.

Mapeley, run by Jamie Hopkins, has outsourcing contracts with the Inland Revenue, Customs & Excise and bank Abbey. It has 22m sq ft (2m sq m) of property under management valued at around £1bn.

But large outsourcing deals are rare, and Mapeley’s reputation with the government has been tarnished by its involvement with the controversial Inland Revenue STEPS deal.

As a result Hopkins has been looking to diversify Mapeley’s activity. He wants to move into direct property investment and has talked of buying £250m-£300m of property before the end of the year, although no purchases have yet taken place.

Peter Ball was appointed as chief investment officer earlier this month to lead the drive into direct property.

Mapeley is on the shortlist for outsourcing contracts with Cable & Wireless and Bradford Metropolitan District Council.

It is also likely to bid for a property deal with the Royal Bank of Scotland and for the government’s Northern Ireland estate, which are due to come to the market in the new year.