Colliers is Acquiring 65% Stake in Rockwood Capital

CRE services giant Colliers is acquiring a 65% stake in Rockwood Capital LLC, an investment firm with more than $12 billion of assets under its management. Financial terms were not disclosed for the deal, which is expected to close in Q3 this year.

According to reports, Rockwood’s senior leadership team will retain the balance of equity in the investment firm and continue to lead the firm under a partnership agreement.

Rockwood’s portfolio includes multifamily, office, mixed-use, life science, hospitality and retail properties.

The acquisition of 65% of Rockwood is the latest in a series of partnership deals for majority stakes Colliers has announced, including an agreement in January to acquire a 75% stake in Basalt, an infrastructure investment firm with $8.5B of assets under management.

In 2018, Colliers acquired a 75% stake in Harrison Street, a Chicago-based investment firm that is a pioneer in demographic-based real estate investing.

Jay Hennick, chairman and CEO of Colliers, said that Colliers will have a combined total of $77B of assets under management once the Rockwood and Basalt acquisitions are completed.

Colliers’ co-chief investment officer Zach Michaud said in a statement that the partnership will expand Colliers’ operations in the US and add several new asset classes and strategies, “including excellent capabilities in the rapidly growing real estate credit space.”

Colliers expects the annual run rate of management fee revenue from the deal to be up to $75M and operating results to be “significantly accretive.”

“With private real estate benefitting from macro tailwinds, we anticipate a continued increase in investor allocations to high=quality firms like Rockwood,” Michaud said.

“We also expect this partnership to benefit from the combined limited partners across our entire platform due to enhanced product selection, world-class expertise and top-tier risk-adjusted returns,” he added.

Rockwood Managing Partner David Becker cited Colliers’ “decentralized operating model, significant inside ownership and impressive performance over many years” as key factors that persuaded Rockwood’s leadership to enter the partnership deal. 

Berkshire Global Advisors and Kirkland & Ellis provided financial and legal advice for the transaction.  According to Kirkland & Ellis, Rockwood’s senior leadership team will continue to run the investment firm under the “perpetual partnership” model with Colliers, which provides for “long-term stability and orderly succession.”

Headquartered in New York, with offices in Los Angeles and San Francisco, Rockwood specializes in equity and credit investments, with investors including many of the largest public and private pension plans, sovereign wealth funds, endowments, foundations and insurance companies.

Rockwood’s founders served as investment advisors to the Rockefeller family in the 1990s.