It has been nearly five years since Cleveland, Ohio-based The Townsend Group opened an office in London to replicate its North American investment consulting business, where it advises more than 100 institutional clients. Since then, there have been few other examples – perhaps even none – of a compatriot consultancy firm expanding to Europe. Last month, however, PERE revealed how Courtland Partners was considering doing the same as Townsend and had hired its first Europe-based employee, Gianluca Romano, as managing director.
News of Courtland’s hire immediately drew comparisons with Townsend, which announced its move into Europe in March 2009 with the hire of Adam Calman from Cushman & Wakefield. At the time, Townsend described the move as reflecting how large institutional investors were attempting to access real estate opportunities around the globe.
Courtland’s hiring of Romano, who previously worked at Morgan Stanley Real Estate Investing, Boston Venture Partners and Vision Consulting, is similar to Townsend in that Courtland also wants to boost its existing services via international expansion. From Europe, it can better advise existing US investors when it comes to investing in Europe. Equally, it expects to grow a business advising European investors in their desire to invest in US real estate.
Courtland and Townsend share at least three things in common. Both hail from Cleveland, both are long established (in Courtland’s case, it began advising clients in 1995) and both can boast an impressive roll of institutional clients. Moreover, Courtland was started by Michael Humphrey, who once worked at Townsend for four years as a senior consultant, intertwining the companies and sealing them as rivals.
Still, Courtland does differentiate itself from Townsend in one important respect. It argues that it acts exclusively as a fiduciary advisor. In other words, it doesn’t manage funds in the same way as others that mix advisory work with fee-earning business from discretionary investment mandates.
Romano said he chose to join Courtland because of its position as a pure fiduciary financial advisor, noting how other consultants had blurred business lines and their advisory role by also managing funds. “We are all the way over on the pure fiduciary side,” he added. “We don’t have our own fund earning performance or management fees.”
Humphrey, founder and managing principal of Courtland, said: “We are excited to have [Romano] join the firm. Not only will he enhance our capabilities with respect to the European markets and managers, he will help us in developing and providing services to European and other non-US clients.”
In fact, sources said Courtland is the favorite to land a mandate to advise France’s CNP Assurances on investing in North American real estate. Last year, CNP invited consultants to pitch for the mandate, and the hire of Romano is being seen in Europe as an important one to help service CNP.
Courtland declined to comment on the French insurer. However, in an interview with PERE, the firm said that it had experienced unsolicited interest from actual and prospective clients based in Europe looking to invest in the US. Traditionally, roughly 45 percent of the investment recommendations it has made have been for non-US real estate.
Opening an office in Europe is the first step of Courtland’s geographic expansion, Romano noted, adding that the firm is working on gaining a license from the UK’s Financial Conduct Authority, which he cautioned could take months. In due course, extra resources will be added in Europe as the business grows.
Europe’s indigenous consultant fraternity and indeed Townsend had better watch out.
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