Townsend seeks expanded investor base with Riverside-led deal

The Cleveland-based advisory and manager is looking to tap into private wealth channels following the close of the deal.

A group of investors led by the Riverside Company has acquired advisory the Townsend Group from Aon, a deal which will allow the Cleveland-based advisory to improve its management’s alignment with clients and tap into fresh capital sources, including more private wealth channels.

In addition to New York-based manager and advisory Riverside, the co-investment group included New York-based manager Bluerock, Sydney-based fund manager MLC Private Equity and Cleveland-based Ten Capital Management. The financial terms of the deal were not disclosed, and the firms involved declined to comment at the time of publication.

“This new partnership ensures continuity and exciting growth opportunities for our clients and further development opportunities for our colleagues,” said Anthony Frammartino, president of Townsend, in a published statement.

Upon the transaction’s close, Frammartino will take up the roles of chairman and chief executive officer at Townsend. The firm did not provide further details on how the deal would enhance management alignment.

Townsend expanded its equity ownership four times – in 1997, 2005, 2011 and 2014 – before its sale to Aon in 2017, according to its website. Under the deal, Colony NorthStar, now Florida-based real estate investment trust DigitalBridge, and Townsend executives sold 100 percent of the company to the London-based insurer.

Market participants familiar with the situation said the deal will provide Townsend with better access to private wealth groups, such as ultra-high-net-worth investors and family offices, as well as retail capital such as defined contribution retirement investors.

As part of the transaction, Townsend will form a partnership with Bluerock, which will help the former to expand its access to high-net-worth investors specifically. Ramin Kamfar, chief executive officer at Bluerock, described the alliance as a “natural fit” in a written statement.

Sovereign capital sources, including Australian superannuation funds via MLC Private Equity, would be another area of expansion. Townsend’s current client base includes US and international public and private pensions, Asian and other sovereign investors, private wealth, insurance companies and endowments.

Townsend’s investment offerings span real estate private equity investing, secondaries, recapitalizations, programmatic joint ventures and outsourced chief investment officer services. In recent years, Townsend has also grown its fund practice within the US and globally to target more specialized strategies. PERE data showed the firm’s fund business manages $24.2 billion in assets currently with one fund in market, the Townsend Opportunity Zone Fund, which has a $300 million target.

There will be no headcount reductions as a result of the deal, sources said, though the firm may look to grow its footprint in Korea and Japan where Townsend has continued expanding client relationships. At present, Townsend’s global footprint includes more than 110 employees across offices in Cleveland, London, Hong Kong and San Francisco. The firm advises clients with real assets in excess of $218 billion.

Townsend has operated as an independent entity under Aon’s ownership. After the close of the sale during the third quarter, the insurer will maintain its own team to service its real estate investment programs while also collaborating with specialists such as Townsend to work on more specific client needs.