Townsend holds final close on FoF

The Cleveland-based investment management and advisory firm raised just over half of its original target for the controversial vehicle, which it launched in 2012.

The Townsend Group has held a final close for its opportunistic real estate fund, Townsend Real Estate Alpha Fund. The multi-manager vehicle secured $357.5 million in commitments from more than 50 limited partners, including public and private pension plans, foundations, endowments and high-net-worth individuals.

The Cleveland-based real estate investment management and advisory firm, led by Terry Ahern and Kevin Lynch, held a first close of $86.5 million for the fund in August 2012, with an original target of $600 million, according to filings with the US Securities and Exchange Commission. The firm apparently secured $100 million in commitments over the last four months of the fundraising, as its equity haul had reached just $252.2 million as of September 2013, according to a filing at the time.

Townsend Real Estate Alpha Fund will invest in co-investments, secondary fund interests and select primary funds. Townsend already has committed or deployed about two-thirds of the fund’s capital across multiple strategies and geographic areas.

The fund, however, highlights what has been perceived as Townsend’s two conflicting businesses. Founded in 1983 by Ahern and Lynch, the firm won its first institutional advisory mandate with the Ohio Police & Fire Pension Fund in 1986. Today, the firm continues to serve as the real estate consultant for more than 50 institutional clients, including the California State Teachers' Retirement System, Florida State Board of Administration and the New Mexico State Investment Council, through its advisory consulting services business.

Townsend, however, also has an investment management business, known as Townsend Implemented Solutions, that invests third-party capital through co-investments, secondary transactions, joint ventures and club deals. The firm was awarded its first co-investment mandate in 2007 and was managing approximately $10.7 billion on behalf of more than 35 clients as of June 30. It previously raised the Townsend Select Opportunities Fund, which collected $53.3 million of a $150 million target, according to an SEC filing.