ALTERNATIVES

NorthStar Asset Management acquires Townsend Group from GTCR

NorthStar Asset Management Group is acquiring an approximately 85% stake in real estate consulting firm Townsend Group for $380 million from private equity firm GTCR, said Eileen Rochford, GTCR spokeswoman, in an e-mail.

She declined to answer questions beyond the news release.

Townsend currently has about $13 billion in assets under management and advises on about $170 billion in assets. Most of Townsend’s revenues is derived from its asset management business, a NorthStar press release shows. Townsend’s money management business represents 80% of revenues, with consulting assets representing 20%. NorthStar is a real estate asset manager with about $24.7 billion in assets as of June 30.

GTCR’s portfolio company, holding company Aligned Asset Managers, acquired Townsend in 2011. GTCR provided funding for Townsend’s recapitalization at that time behind Terry Ahern, Townsend founder and CEO, and the existing management team. At the time, Mr. Ahern, Kevin Lynch, principal, and six other Townsend shareholders signed employment contracts of three to five years.

Townsend’s management team will own the remainder of the business and run the direct day-to-day operations when the deal closes in early 2016.

"We are extremely pleased with this strategic opportunity to expand and accelerate our asset management capabilities, both in the United States and internationally, with the acquisition of one of the world's premier institutional real estate asset management platforms,” said David Hamamoto, NorthStar executive chairman, in a news release. “Townsend, which sits at the epicenter of the global real estate market, having significant influence over $170 billion of real estate, has a brand and franchise that is second to none."

Joe Calabrese, NorthStar spokesman, and Mr. Aher could not be reached for comment by press time.

Aligned Asset Managers executives could not be reached to determine whether the company is still in business. The telephone of James J. Cahill, chief financial officer and secretary of Aligned, was disconnected. SEC documents show that any investment adviser acquired by Aligned would be barred from providing fund services for 10 years. The same GTCR funds that owned Aligned also owns brokerage firm ConvergEx Group, which in 2013 admitted to fraud charges for deceiving customers about commissions. An application for an exemption from the disqualification was rescinded by GTCR and Aligned in July, SEC documents show.