Thursday, January 20, 2011

Interview: Mr. Nicholas Wong, Principal, The Townsend Group

The Townsend Group was founded in 1983 by Mr. Terry Ahern and Mr. Kevin Lynch on the premise of providing uncompromised and unbiased real estate investment advice to institutional investors worldwide. Headquartered in Cleveland, it is the largest specialty real estate investment consulting firm in the industry.
In addition to Mr. Ahern and Mr. Lynch, the team is comprised of 52 real estate professionals, including 31 Principals, Consultants and Associates and a dedicated research initiative. Townsend provides global property investment counsel to more than 85 clients on both a discretionary and non-discretionary basis, representing real estate allocations in excess of $100 billion. Its clients include public pension funds, corporations, foundations, endowments, financial institutions and Taft-Hartley plans ranging from $300 million to over $130 billion in total plan assets.
Early this year, the company opened its first office in Asia, located in Hong Kong and appointed Mr. Nicholas Wong, former managing director Asia Pacific of ING Real Estate Select, as principal to focus on business development and investment underwriting in the region. Prior to joining ING in November 2007, he had held senior positions in real estate investment and commercial banking, as well as listed securities analysis. He has been in real estate investment and finance for 22 years with the past 16 years in Asia, having started his career in the US as an appraiser.
“We already have $3.2 billion invested in the region and will focus on business development and investment underwriting in the region. The real estate investment strategies currently available in the Asia Pacific markets are unique in their ability to bring true growth opportunities to global investors,” he said.
Townsend’s global scale and its expertise in manager selection will ensure that the company will be able to offer investors wishing to enter these markets insights into the region that would be difficult to match elsewhere, he noted.
His team is responsible for finding best in class funds/managers and undertakes terms negotiation, due diligence and subsequent investment management, as well as business development in Asia Pacific.
“The Townsend Group is an employee-owned private company. Since 1986, when we earned our first retainer client, our exclusive focus has been providing best-in-class institutional real estate consulting services. We recognized early on that real estate as an accepted institutional investment asset class would grow not only in size but also in complexity. As a result, we structured our company to be prepared for the coming changes,” he said.
Mr. Wong noted that the company began by establishing a dedicated research initiative which has been under the direction of its current Director of Research since 1989. It further broadened the breadth and depth of the team by adding the founders of two other institutional real estate consulting groups, and complementing the team with other key individuals with experience in law, finance, accounting, banking, real estate development, asset management, property management, research and academia.
As a result, Townsend has the most experienced and multi-disciplined staff in the industry. The quality, stability and depth of the team, their commitment to the development of the finest resources, capabilities in investment manager and product selection, and zealous client advocacy resulted in its consulting model being favored by the institutional plan sponsor community.
“We offer both discretionary and non-discretionary consulting services to our clients. Discretionary clients have further entrusted The Townsend Group with the increased fiduciary responsibility associated with the selection of investments subject to Townsend’s discretion without the additional process of going through the clients’ internal investment approval process. Townsend’s basic services are similar in both discretionary and non-discretionary mandates, but the primary differences typically reside in which party retains the authority for ultimate approval of investments,” he said.
In addition to the depth, stability and experience of the professional, the company offers other areas of expertise and experience relevant to clients.
“Given our extensive knowledge of and familiarity with providing consulting services to public pension funds, we are familiar with the issues facing larger public plan investors in real estate, including designing and implementing strategies across multiple sectors in the private and public markets, investing in wholly-owned properties through separate accounts, and developing investment guidelines and procedures.”
Speaking on the Korean market, he noted that Townsend has historically invested in the region and finds that it has a very attractive client base.
A couple of months ago Korea's National Pension Service, the world's fifth-largest pension fund, committed to invest $300 million in troubled real estate through Townsend Group, in a separately managed account. It primarily will focus on snapping up stakes in distressed private-equity real-estate funds and recapitalizing these funds.
The move by NPS, with more than $250 billion in assets, comes as a growing number of opportunistic investors are buying into troubled property funds in deals that give them a steady return and potentially a share in the profit when real-estate markets rebound, he said.
That aside, he finds China and Japan to be the most promising markets in the region. While China is a growth story, with a booming middle class, although Japan has a greying population, there are a lot of distressed ownership of assets in the market.
As for the challenges for the group, he said there is still a lot of uncertainty about the global economy. The company is looking at getting more risk exposure across the region.