Investment consultancy Aon is buying real estate specialist The Townsend Group for $475m (€399m).
The company is being sold by the recently merged Colony NorthStar and will bolster Aon’s offering in alternative private market assets.
Terry Ahern, chief executive of Townsend, will lead the expanded real estate and real asset investment services of Aon.
Townsend advises on $175.7bn in assets and manages $14.5bn. Aon, one of the largest providers of outsourced chief investment officer (OCIO) services to pension funds, advises on $4.2trn of assets and manages more than $100bn.
Townsend, which has been advising US pension funds on their real estate investments for more than 30 years, has more recently expanded its business to advise and manage investments on behalf of global investors, while also moving beyond real estate into other forms of real assets.
The company was bought by real estate investment manager Northstar Asset Management in 2015 before it merged with Colony Capital.
“Townsend is a terrific non-core legacy NorthStar business, but by the closing of the Colony Capital-NorthStar merger in January of this year, it became clear that the market perceived a conflict with Colony’s institutional investment management business,” said Richard Saltzman, president and chief executive of Colony NorthStar
“The divestiture of Townsend is definitely bittersweet for Colony NorthStar. But we’re extremely pleased that the talented Townsend team has found a great new home with Aon.”
Ahern said: “We were happy to have a large number of quality firms that wanted to partner with us, but it was the commonality of culture, approach and expertise that led us to Aon.
“We look forward to having additional opportunities to continue our evolution that we began 30 years ago, while leveraging the platform, capabilities and people that, together, Aon and Townsend can offer to clients.”
Cary Grace, chief executive of global retirement and investment solutions at Aon, said: “Our clients’ investment strategies are focused on driving the strongest risk management and return outcomes, and alternative private market investments are playing an increasingly important role in those strategies.
“This acquisition will unite two investment industry leaders that provide objective advice and implemented OCIO solutions to institutional investors.
“Together, we will expand our capabilities and expertise to create sophisticated investment solutions that best serve our clients and further accelerate our growth.”
The transaction is expected to close over the next six months.