The Grosvenor Group took on its present corporate form in the year 2000, after nearly fifty years of expansion inside and outside the UK.
The key elements are:
- We adopted a group structure in which a holding company owns the shares in six operating companies in different parts of the property market.
- Five of these entities are regional property development and investment companies, focused on the Americas, Australia, Asia Pacific, Britain & Ireland, and Continental Europe.
- The sixth entity is an international property Fund Management company, with a similar geographical reach.
The Group’s primary financial objective is to maximise returns at acceptable levels of risk. Fundamental to this is the optimal allocation of equity between each of the Operating Companies and the devolution of property decision-making authority to local boards.
The allocation of equity to regional Operating Companies is a continuous process on an annual cycle. The process includes detailed research of long term (5+ years) macro-economic projections, a review of regional economic and Operating Company historic and projected performance, consideration of wider issues such as climate change, and the use of portfolio theory simulations. From this, the Holding Company determines a range of the desired relative weighting of capital to each region over the long term. Medium term (2-5 year) target weightings are set by reference to long term ranges, adjusted for medium term factors. Actual annual allocations are made consistent with medium term targets and long term ranges, but in response to short term (0-2 year), tactical and opportunistic considerations. The Group retains the financial capacity for unplanned opportunities that may arise.
At the Operating Company level, each board reviews the strategy within its region annually. This review takes account of the geographic allocation in the region as well as the allocation between sectors and the split between investment and development.