After long eyeing an expansion into private real estate, a $182B asset management company pulled the trigger with the acquisition of a private equity firm that will boost its alternative investment capabilities.
Artisan Partners Asset Management has an agreement in place to fully acquire Grandview Property Partners. The 6-year-old private equity firm specializes in acquiring, developing and overseeing properties across the U.S.
Grandview manages $940M in institutional assets, including more than 14M SF of industrial properties as well as office and residential projects. The Connecticut-based firm has raised three discretionary closed-end drawdown funds since its founding in 2019.
“The acquisition marks a significant advancement in our strategic expansion into alternative investments, establishing a foundation in private real estate and creating new pathways for growth,” Artisan President and CEO Jason Gottlieb said in a statement.
The deal is slated to close in the first quarter of next year, subject to normal closing conditions. Artisan said it expects the acquisition will give a modest bump to Grandview’s earnings per share after the final closing of the firm’s next fund.
Grandview will maintain full investment autonomy, CEO Raj Menon said. The acquisition will increase Grandview’s investment capabilities through access to the larger firm’s institutional caliber and global distribution scale, he said.
Artisan reported $182.6B in assets under management at the end of October. Its Artisan Funds and Artisan Global Funds accounted for $88.5B of that, while the other $94.1B came from separate accounts and other assets under management.
As part of the company’s third quarter earnings call on Oct. 29, Gottlieb alluded to an opportunity that Artisan was pursuing with a “really good upside” in real estate. But he also reinforced that any merger and acquisition opportunities the company were to pursue would not be transformative for Artisan.
“We’re going to look at things that are going to keep us true to who we are, build around a really exciting and talented group or individual, resource them, make sure that we have an alignment from a business mindset, and grow it,” Gottlieb said during the earnings call.
With cheaper debt and dealmaking picking up, there have been a string of mergers and acquisitions across the real estate services landscape.
Compass agreed to spend $1.6B in September to acquire Anywhere Real Estate. Formerly known as Realogy, Anywhere owns Coldwell Banker, Corcoran and Sotheby’s International Realty.
Douglas Elliman sold its property management business to PMG Holdings, a subsidiary of property management behemoth Associa. PMG paid $85M to acquire Douglas Elliman Property Management in the deal from last month.
Other sectors of real estate are also seeing increased M&A. Fifth Third Bancorp bought Comerica in an October deal valued at nearly $11B, and in September, Rithm Capital bought Paramount Group, an office REIT, for $1.6B.
Artisan Partners was represented by Simpson Thacher & Bartlett LLP and advised by Broadhaven Capital Partners and Hodes Weill & Associates. Grandview Partners was represented by the Polsinelli Law Firm.