UPDATE 1-Soros buys IGD stake in bet on Italian real estate

Mon Mar 3, 2014 7:22am EST

By Claudia Cristoferi and Isla Binnie

MILAN, March 3 (Reuters) - An investment fund managed by billionaire financier George Soros has bought 5 percent of cooperative Italian shopping centre group Immobiliare Grande Distribuzione (IGD), signalling confidence in a sector hit hard by a deep recession.

Quantum Strategic Partners, managed by Soros Fund Management, on Monday bought about 3.15 percent of IGD from the company and the rest from second-largest shareholder Unicoop Tirreno, becoming the company's third-biggest investor.

The value of the transaction was not disclosed, but 5 percent of IGD would be worth around 19.7 million euros ($27.2 million) at current market prices, according to Reuters calculations.

Shopping centre developer and manager IGD had struggled to arrange meetings with potential foreign investors, who were worried about falling property prices and high debt in Italian real estate, the group's CEO told Reuters in an interview.

Italy, the euro zone's third-largest economy, is only slowly emerging from its biggest recession in 60 years.

"The situation changed radically in the second half of 2013," said IGD Chief Executive Claudio Albertini, while adding that high unemployment and weak consumer data showed Italy was not out of the woods.

"We have not emerged from the crisis ... but the financial markets are anticipating trends and in this case international investors come in just when they see a prospect of recovery."

Soros Fund Management was not immediately available to comment.

IGD said last week its 2013 core earnings fell 3.6 percent, but Albertini said on Monday that 2014 had begun well, with a 3.5 percent rise in visitors to its Italian malls in January.

Societe Generale analyst Henri Quadrelli said Quantum's investment was a vote of confidence in IGD and the Italian economy.

"The general problem with the Italian real estate market is that it is seen to be neither very transparent nor very liquid," Quadrelli said. "Soros can introduce a more dynamic, decisive element to the company's management."

IGD's shares bounced 3.5 percent to 1.18 euros ($1.63), while Italy's all-share index was down 1.9 percent on the day.

The price Quantum paid for the stake in IGD, whose business is focused on Italy and Romania, may be filed to Italy's bourse over the next few days. The deal is due to close on March 5.