StepStone in talks to buy Courtland – Exclusive

The New York-based private markets firm has been in discussions to buy the Cleveland, Ohio-based real assets consultant, which has attracted a significant amount of interest from potential buyers.

After beginning a sale process earlier this year, Courtland Partners is moving closer to finding a potential buyer, PERE has learned.

New York-based private markets firm StepStone Group has been in talks to buy the Cleveland, Ohio-based real assets consulting firm and is considered a lead contender in the sale process, according to multiple sources familiar with the matter. Courtland’s clients were recently informed that the two groups were proceeding with their discussions on a potential sale.

In June, PERE reported that Courtland Partners was considering a possible sale, and had attracted a significant amount of interest from potential buyers. One such party is understood to have been Bala Cynwyd, Pennsylvania-based alternative investment manager Hamilton Lane, which subsequently abandoned its bid in favor of acquiring Real Asset Portfolio Management, a Portland, Oregon-based real assets investment firm, in August.

Courtland was said to have hired Ocean Park, a Los Angeles-based boutique investment bank, to oversee the process.

StepStone invests in all private markets strategies, including private equity, private debt, infrastructure and real assets, real estate and hedge funds globally. The firm also offers advisory services for institutional investors.

Real estate is one of the newer businesses for the company, which expanded into the sector in 2014 with the acquisition of Clairvue Capital Partners, a San Francisco-based real estate investment firm. StepStone Real Estate, which is led by Jeff Giller, is focused on providing liquidity to private real estate funds, portfolios and other types of real estate vehicles and investors through recapitalizations and secondary investments. As of August, the business had $700 million of regulatory assets under management, according to a filing with the Securities and Exchange Commission.

2017 has been an active year for StepStone on the real estate front. In February, StepStone closed on $700 million on StepStone Real Estate Partners III, beating the fund’s original $500 million target. The fund, which focus on investments in the US and Europe, was the first vehicle the team raised following the acquisition of Clairvue by StepStone. In June, StepStone hired Jay Morgan, who was formerly a senior consultant at Courtland, as a managing director, focusing on research, manager selection and primary and secondary investments in private real estate funds.

Courtland’s management team currently comprises managing principal Steven Novick, managing director Michael Murphy, managing director of Europe Gianluca Romano and senior vice president Andrew Mitro. A succession plan that expanded the firm’s ownership and leadership to include latter three additional senior executives was finalized in June. The estate of managing principal and co-founder Michael Humphrey, who passed away suddenly in November, and Courtland EPPV 2016, an employee profits interest plan, also continue to have ownership interests in Courtland. The firm had 30 employees, of which 26 are in investment advisory roles, and nearly $68 billion of assets under advisement and $2 billion of assets under management as of September, according to an SEC filing.

StepStone and Courtland both declined to comment.