Toronto-based Colliers International, which has been aggressively growing its investment management business, plans to expand it further by taking a majority stake in a U.S. firm.
Colliers said this week it has reached an agreement to buy a 65% stake in Rockwood Capital, a New York City-based real estate investment firm that manages more than $12 billion worth of properties and assets. Rockwood, which also has offices in Los Angeles and San Francisco, makes equity and credit investments in the multifamily, office, mixed-use, life sciences, hospitality and retail property sectors.
Financial terms of Colliers' planned investment in Rockwood, expected to close in the third quarter, were not disclosed. Once the deal is completed, Colliers said it expects the annual run rate of management fee revenue to be between $70 million and $75 million.
"Our partnership with Rockwood will expand our operations in the U.S. and add several new asset classes and strategies, including excellent capabilities in the rapidly growing real estate credit space,” Zach Michaud, co-chief investment officer of Colliers, said in a statement.
Michaud said Colliers expects investor allocations to real estate to continue to increase because the industry is "benefiting from macro tailwinds."
Colliers' planned investment in the investment management firm is the brokerage's "latest step in our ambitious growth strategy" to build its investment management platform, Chairman and CEO Jay Hennick said in a statement.
In January, Colliers agreed to acquire 75% of Basalt Infrastructure Partners, a trans-Atlantic investment management firm with offices in London and New York. Colliers' acquisition of a majority stake in Basalt, which invests in the utility, transportation, communications and energy sectors in Europe and North America, is expected to close later this year.
"The addition of Rockwood demonstrates our continued focus on building scale, expanding on the success of Harrison Street and Colliers Global Investors, executing on the recently announced transaction with Basalt, and capitalizing on the outstanding fundraising momentum we have experienced over the past several years," Hennick said.
When Colliers' pending transactions are completed, it will have approximately $77 billion in assets under management, Hennick said.
In Rockwood, Colliers would acquire a majority stake in a firm whose investors include large public and private pension plans, sovereign wealth firms, foundations, insurance companies and high-net-worth individuals.
If the transaction is completed as planned, Rockwood's senior leadership team, which includes Managing Partners Tyson Skillings and David Becker, would continue to lead the business under a partnership model with Colliers designed to ensure long-term stability and an orderly succession over time, Colliers said.