Insurance broker Aon has agreed to buy US-based real estate investment specialist Townsend from recently merged Colony Northstar for $475 mln (€400 mln).
Aon, a London-based provider of risk management, insurance brokerage and reinsurance brokerage, said the deal will bolster its ‘offering in alternative private market assets, reflecting the increasingly important role they have in client portfolios’.
‘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,’ commented Cary Grace, chief executive officer of global retirement & investment solutions at Aon. ‘This acquisition will unite two investment industry leaders.’
The deal represents a major step in Aon’s attempt to become a global consulting firm advising companies and institutions on a range of issues including employee benefits and investment management. The company entered the alternative investment advisory sector in 2010 with the acquisition of benefits consultant Hewitt.
Aon's Investment organization currently manages over $100 bn of worldwide assets and advises on $4.2 trl of assets globally. The group has been trying to increase its commitment to high-value investment solutions and the acquisition of Townsend will add $14.5 bn in assets under management to Aon’s portfolio, ‘bringing greater depth of expertise in real estate and real assets to Aon's distribution scale’, the company said.
Founded in 1983, Townsend has offices in Cleveland, San Francisco, London and Hong Kong. The company advises on $175.7 bn in global assets and recently raised $496 mln for its latest global private real estate fund, Townsend Real Estate Alpha Fund II.
Townsend was bought by Northstar before its merger with Colony in October 2015. Northstar paid €332 mln at the time for an 85% stake in the group, whose clients include many of the world's global investors in North America, Asia, Europe and the Middle East.
'The divestiture of Townsend is definitely bittersweet for Colony Northstar,’ said Richard B. Saltzman, president and CEO of New York-listed Colony Northstar.
The company said it is selling the business because the market perceived a conflict with Colony’s institutional investment management business following completion of the merger between Colony and Northstar in January. ‘Townsend is a terrific non-core legacy Northstar business,' said Saltzman.
Townsend's management team owns the remainder of the business. Terry Ahern, CEO of Townsend Group, will continue to lead real estate and real asset investment services as part of Aon's Global Retirement & Investment organization.
‘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,’ said Ahern, who co-founded the firm. The deal is expected to close over the next six months.
Morgan Stanley & Co acted as exclusive financial advisor for the transaction.
_______________________
13 September 2017
Global Capital Flows Briefing
Colliers International
08.00-10.30
