GTCR follows ‘leader’ into real estate

The mid-market specialist, whose leadership is profiled in an in-depth PEI feature this month, has gained indirect exposure to real estate investing through its most recent acquisition.

In August, GTCR portfolio company Aligned Asset Managers purchased a majority stake in Chicago-based real estate advisory and investment firm The Townsend Group for an undisclosed sum.

“Townsend represents the ideal platform investment for Aligned,” said David Minella, chief executive officer at Aligned. “It embodies our strategy of focusing 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.”

In some ways, the transaction is a trademark deal for GTCR, whose “leaders strategy” involves backing CEOs and helping them build companies through add-on acquisitions and other operational changes. Since the mid 1980s, the firm’s modus operandi has always been the same: seek out an ideal CEO for a given platform, doggedly pursue him or her until the offer is accepted, then help the CEO build a company. GTCR partnered with Minella in January to form Aligned.

The investment marks a step in a new direction for GTCR, however, as it gives the mid-market specialist indirect exposure to real estate investing. GTCR traditionally operates in just three core sectors: financial services and technology, healthcare and information services and technology.

Whether GTCR’s investment thesis continues to lead the firm into less traditional areas than its usual bread and butter sectors, GTCR is expecting a very busy end of 2011, principal Phil Canfield told Private Equity International earlier this year. “I think it’s going to be a really exciting deal-making environment for us over the next six months. We have a lot of CEOs that we’re talking to right now who have active investment ideas and businesses we think we can buy and drive transformation. So I would anticipate a lot of activity.”

Magazine subscribers can read more about GTCR in an in-depth feature on the firm here.