Executives at alternative investment consulting firm Aksia LLC say that they are taking care to address potential conflicts of interest as the company completes the acquisition of real estate consultant Alignium LLC, a deal announced five months after Aksia's purchase of private equity consultant TorreyCove Capital Partners LLC was finalized.
Aksia decided to buy Alignium because the firm covered every alternative investment asset class other than real estate.
There are two benefits to acquiring Alignium and TorreyCove, said James Vos, New York-based CEO of Aksia. "One, we can work for clients in more asset classes, which is a commercial benefit," he said. "The second is, let's say we're looking at a fund or co-investment that is a credit strategy in the real estate market. We would need some credit people looking at it, but you'd also better understand the real estate market, too."
Aksia's expansion is in keeping with the evolution of the consulting industry, Mr. Vos said.
The range of services in Aksia's base package has steadily increased.
"We have to recruit people with direct deal experience in private credit and private equity as well as people from the fund of funds or LP (limited partner) side of the industry," Mr. Vos explained. "A consultant did not have to do that 20 years ago."
Alignium executives agreed to the deal to gain a global footprint.
"Clients expect a global perspective — these issues have been made acute due to COVID-19," said Dan Krivinskas, Chicago-based managing principal of Alignium.
Industry consolidation is making it more difficult to find consultants that don't offer some sort of money management that can lead to conflicts.
"Frankly, we enjoyed being independent," Mr. Krivinskas said.
But after several years of Messrs. Vos and Krivinskas meeting at each other's offices and discussing business strategies over bagels and pizza, the pair decided to combine.
"Global presence is critical today," Mr. Krivinskas said.
Aksia's global resources would allow Alignium to meet clients' expectations of worldwide sourcing and offer a wider array of risk management tools, he said.
"Within the real estate industry, there are virtually no pure-play independent consultants left," Mr. Krivinskas said. "We are surprised by investments being made by others and wonder how some consultants arrived there. Are investments being made to generate a co-investment or secondary opportunity for their managed fund?"
Aksia has about $160 billion in assets under advisement and $10 billion in assets under management. Alignium's assets under advisement are about $2 billion.
