GTCR buys stake in real estate advisor

The Townsend Group, a real estate advisory and investment firm, has been 70% sold to Aligned Asset Managers, a GTCR portfolio company.

Cleveland-based real estate advisory and investment firm The Townsend Group has been majority sold to Aligned Asset Managers, a portfolio company of Chicago-based private equity firm GTCR.

The size of the stake was not disclosed in an announcement of the sale but Private Equity International understands the deal comprised a 70 percent sale with the remaining 30 percent to be retained by Townsend principals. No sale price or enterprise value for the company, which advises on more than $100 billion of assets, was disclosed either.

“Townsend represents the ideal platform investment for Aligned,” said David Minella, chief executive office at Aligned. “It embodies our strategy of focussing on industry leaders in growing asset classes, and we look forward to helping Townsend build on its strong track record and deep relationships with a world-class institutional investor base.”

Townsend manages and allocates real estate capital on a discretionary and non-discretionary basis for more than 85 institutional clients from its offices in Cleveland, San Francisco, London and Hong Kong.

According to one source familiar with the firm, the tie-up with Aligned is expected to bring with it access to many more investors and consequently opportunities to allocate their resources into real estate investment vehicles. “For the employees of Townsend, this is very positive as it will probably introduce more LPs to the firm,” he said.

   

 

For the employees of Townsend, this is very positive as it will probably introduce more LPs to the firm.

Source with knowledge

The investment by Aligned is also expected to see the 32-strong senior headcount at Townsend increased across its offices. The source said: “Now there is new capital to grow the business and give key employees more incentives to help with that.”

Two people who will definitely be around to oversee that growth are Terry Ahern and Kevin Lynch, the firm’s founding partners, as both have signed new five-year contracts as part of the deal. They will continue to run the business on a day to day basis alongside fellow principals Joe Olszak, Anthony Frammartino and Nick Cooper. The firm is expected, however, to implement a new board of directors which will also include Aligned executives.

Townsend was formed by Ahern and Lynch in 1983 at a time when real estate was a relatively new asset class for institutional investors. The firm has since grown to become one the biggest advisory players in the sector, recently participating in investment structures including Brookfield Asset Management’s $5.5 billion Real Estate Turnaround Consortium, which was responsible for the recapitalisation of US retail REIT General Growth Properties, among others.


Aligned Asset Management was formed in January as a result of a joint venture between GTCR and Minella, a former chief executive officer at Vale Asset Management and Lichtenstein Global Trust. The business was formed as a financial services holding company focussed on the asset management sector. According to the announcement, it is still in growth mode and is “engaged in discussions” with other businesses with a view to further investments.

It is a portfolio company of GTCR, the financial services, technology, healthcare and information services-focused private equity firm with a track record of investing more than $8.5 billion in more than 200 companies.