Avison Young Receives $188.6M Equity Investment from Canadian Fund Manager to Grow Platform

by John Nelson

TORONTO — Commercial real estate services firm Avison Young is continuing its growth strategy with a new equity investment totaling 250 million Canadian dollars (approximately $188.6 million) from Canadian pension fund manager Caisse de dépôt et placement du Québec (CDPQ). Toronto-based Avison Young will use the new capital to grow its operating platform in North America.

“CDPQ’s investment will provide additional momentum as we accelerate our innovative and technology-based capabilities and market presence to serve clients,” says Mark Rose, chair and CEO of Avison Young.

In less than 10 years, Avison Young has grown from 300 real estate professionals in 11 offices in Canada to approximately 2,600 professionals in 84 offices in Canada, the United States, Mexico and Europe. The company’s largest U.S. office in terms of staff size is in Washington, D.C., followed in order by Chicago, New York and Atlanta.

Avison Young will use the investment to continue its acquisition strategy of commercial real estate service firms, as well as recruit new talent, open new offices and cover transaction expenses.

“Due to the significant size of the equity infusion we won’t be faced with having to make choices between regions for deployment of capital or be limited in the size of acquisitions we can pursue,” says Steve Dils, managing director of Avison Young’s Atlanta office and one of the principals of the company.

In April, the company acquired Vancouver-based Alcor Commercial Realty Inc., and in November of last year the firm opened an office in San Jose, Calif.

CDPQ’s preferred equity investment will also allow Avison Young to buy back its common shares from current private equity partner Parallel49 Equity (formerly Tricor Pacific Capital Inc.), as well as from shareholders no longer with Avison Young. The move will allow Avison Young to become 100 percent owned by its principals.

“Avison Young is unique in the commercial real estate world in that its stock is spread among over 400 partners and shareholders,” says Dils. “Our structure ensures that any major decisions need a two-thirds vote of the principals, and the fact that we are able to maintain that control and structure with our new equity partner is both unique and significant to the principals.”

As part of the transaction, CDPQ will name three new members of Avison Young’s board of directors. The six remaining board members include Rose, Carol Johnson, Bob Levine, Robert Slaughter, Earl Webb and Cory Wosnack.

The preferred equity investment comprises a newly authorized class of non-voting preferred shares of Avison Young. Other terms of the transaction were not disclosed.

Credit Suisse acted as Avison Young’s financial advisor in the transaction, and DLA Piper LLP and Stikeman Elliott LLP served as Avison Young’s legal advisors.

Caisse de dépôt et placement du Québec (CDPQ) is a long-term institutional investor that manages funds primarily for pension and insurance plans. The Quebec-based fund manager held CA$298.5 billion in net assets as of the end of 2017. CDPQ invests globally in major financial markets, private equity, infrastructure, real estate and private debt.

— John Nelson

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