A Conversation with Jen Stevens, Co-founder of Alliance Global Advisors | Durable Value Ep. 93
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Transcript: Ryan Swehla: Today for our Durable Value podcast, we have a special treat. Uh, we have Jen Stevens, who is the co-founder and managing partner of Alliance Global Advisors. And we have a special relationship because, uh, we were fortunate enough to be one of the early, um, clients of Alliance Global Advisors. And, um, we're gonna talk more about what that looks like, what that engagement looked like.
But it'd be great, Jen, if you could start off by just maybe giving a short career arc of what brought you to, uh, where you are today, and, uh, and then we can kind of Ask questions off of that
Jen Stevens: Absolutely. Thank you, Ryan. It's so good to be on this podcast with you. Appreciate you having us on again. Um, so, um, I started my career at the Townsend Group back in 2004.
Um, and so for the audience members who may not be familiar with Townsend, uh, arguably the largest real asset consultant in the world, and one of the first, um, to focus on real estate, infrastructure, timber, agriculture, and the correlated private real asset space. I began my career at Townsend in their Cleveland, Ohio headquarters, uh, where I worked on both advisory and discretionary clients of the firm, and I met many of the people that are on my team today at Townsend as well.
And in 2008, I moved out to San Francisco. They asked me to take a, a role, client-facing role out in the S- San Francisco office and help to manage the West Coast portfolio of clients that were LPs, uh, that had significant real estate allocations o- on investing their portfolios. And so I moved out to San Francisco and, um, co-managed ultimately the, the West Coast presence for Townsend alongside John Schaefer, who ran the discretionary side of Townsend's business, and I worked on the advisory side.
And my primary responsibility there was serving as, uh, lead portfolio manager or consultant to many of the firm's West Coast clients. Um, any pension plan up and down the state of California I probably worked with in the past. And then I also interfaced quite a bit with the Australian superannuation plans that were under Townsend's advisory client list and, um, some sovereign wealth funds, uh, during the time.
So while, while I was there, I started as an investment analyst in Cleveland, and I grew to become a partner. I was a partner of the firm for about 10 years, uh, through some of their later transactions that they did. I was a member of the advisory investment committee and, um, I initiated and led Townsend's initiatives in sustainability, data, reporting, and collection when I was at Townsend.
So I served many roles, uh, when I was there. And, uh, in 2020, uh, Heather Border, one of my former colleagues, approached me with an idea to launch Alliance Global Advisors and sit on the opposite side of the table that I was on previously at Townsend. And so we launched on April 1st, 2020, Alliance Global Advisors, and we can talk a little bit more about the business.
But my career path, um, is pretty straightforward and simple. Directly out of school- To Townsend, spent 17 years there, and then launched, uh, Alliance Global Advisors in 2020.
Ryan Swehla: That, and that's a, that's a great, uh, segue because, uh, people talk a lot about the LP side or the GP side, or the consultant who sits in the middle, and that transition.
You know, you were, you were obviously consulting predominantly for the institutional investor, or exclusively rather, and there was something that triggered this desire to, uh, provide service to the GP side. And I, I'm, I'm curious, uh, maybe you could s- uh, give a little bit about what Alliance does, and, and why you felt that that was a need in the market.
Jen Stevens: Sure. Alliance exists to facilitate growth initiatives across the investment management landscape in real estate, and that can take a whole, um, host of forms. Um, we are an independent advisory firm, um, that's focused on advising GPs on what I describe as becoming better partners for their ultimate client base and their capital base.
And so when we launched Alliance Global Advisors, we felt that the management community deserved more attention and more, um, really concrete guidance on how to tap into capital sources for the future, how to develop new products for the future, and also how to become more visible, um, and recogni- uh, recognizable across the institutional circuit.
So we developed our business, quite frankly, for the emerging manager space. We felt those managers would, who had not yet raised institutional capital, would benefit from some education and guidance on how to become a best-in-class investment manager. There really weren't many firms serving in that capacity that didn't have capital.
So you had great organizations like GCM Grosvenor, um, for example, and others that always worked alongside more emerging managers and operators. But maybe they didn't have the same bandwidth to sit, you know, side by side with these clients as an extension of staff and help guide them through the next phase of growth within their organization.
And so we launched with that premise in mind, to create more positive impact on the industry as a whole, and also to really serve the role of becoming an advisor to managers that wanted to be better, that wanted to compete for capital, um, that wanted to grow their organizations in a very thoughtful way.
Um, so that was the whole genesis of our business. Today, um, since we launched Alliance in 2020, we've advised, um, over 50 real estate investment managers with assets under management, predominantly in real estate- Uh, topping a trillion dollars. So that is such a humbling number to me, Ryan, because as I mentioned, we thought we were gonna be geared more toward the emerging manager space.
But as we've grown our platform and built our team very deliberately to serve this community, we've attracted clients that are some of the largest global allocators in the world as well as skilled operators, um, like you. And I love- Yeah ... this story about how we came together because when we first launched our business, like a frightening time, right?
2020.
Ryan Swehla: Yep.
Jen Stevens: April Fools' Day. Yep. Global pandemic- ... um, that was setting in. We got an email from Ryan out of the blue that says, "I don't know who you are, but any business that has the courage to launch at this point in time is, you know, a business that we wanna partner with." And so that led to our relationship in this space, and thank you for, um, you know, helping us and giving us that encouragement as well as we were launching our practice.
Ryan Swehla: Well, and, and I'll... I will, uh, reflect back on that because, uh, I've often told people when talking about you guys that, uh, when we first, uh, engaged with you guys, I didn't know what the word DDQ meant. Or the acronym DDQ. And that, that provides the context, and then today we are a, you know, institutional manager.
Our most recent success, a huge one, um, was, uh, Pennsylvania PSERS committed $90 million to our fund four. And, uh, we've, w- we've had other successes along the way, but I, I use that as the example of where that, um, trajectory started to where it is today. I think a lot of times in the, um, y- you know, when, when we see success, we often forget the, uh, humble beginnings of where, uh, where we were.
And, and it's so great how, you know, you're reflecting on those m- dark moments of 2020 and starting the business. And, you know, us having the, the courage to say we didn't know what we were doing at the time. And I think there is some, there's, there's value there in a manager not r- uh, recognizing that they are ill-equipped or recognizing that there are tools that they're missing and coming and engaging with you guys.
I, I'm curious, you know, you sit, you did sit on kind of the advisory side to institutional investors, and now you sit on the consulting or advisory side with the, the managers. That kind of dual perspective or understanding, how has that helped you guys, uh, be able to help real estate managers go to the next level?
Jen Stevens: Sure. Well- I, I, and I, I appreciate what you said about being ill-equipped, but I actually don't believe that you were ill-equipped to have the success that you've had in the recent year. And, um, I, I don't think any of our managers are ill-equipped. They might not have all of the same tools in the toolkit, um, at this moment in their growth story to, um, you know, have the ability to raise capital in the way that you're, you're doing right now.
So I think all of our managers that we're working with are capable. It's how much time, attention, and dedication do you put into the infrastructure that you're building, policies and procedures that are required by institutional consultants and LPs, um, um, maintaining, you know, a really smart strategy that speaks to your areas of expertise and operations, and how do you put that in a nice package out to marketplace in a way that they're going to be receptive?
So our team collectively has probably sat through 10,000 pitches from investment managers, smartest in the world, um, coming in and pitching business, because when you're on the LP consulting side, you're the gatekeeper to the capital, and you have to understand and underwrite strategies and make informed investment decisions.
And I, and anybody at Townsend will tell you what I'm about to tell you. It is a position of privilege to be able to sit in rooms with CEOs of some of the largest organizations and the smallest organizations in the world that are highly skilled at research and operations and asset management, and see how they're operating differently.
So that perspective, you know, having that exposure is really incredible. I think there's also a, um, a unique lens that our team brings to marketplace, um, both having the LP consulting experience and now the GP consulting experience, and that is a really deep understanding of how real estate- Benefits a, a well-rounded and diversified portfolio.
So o- on the consulting side, as a specialist, you sit alongside a lot of generalists that are, um, putting asset allocation models in place and helping their investors understand where real estate fits in a portfolio. Not only that, but you're looking at how every property type interacts with another property type, and there is, um, a benefit to having that type of education, and there's no better education than being on the consulting side in that world to understand that real estate does deserve a place in a well-diversified institutional investment portfolio, and it certainly des- deserves a place in a private real assets portfolio.
That notion is being challenged right now, and it does inform how we're shaping and putting new products to market for our clients that are looking to innovate and do things a little bit differently. And so I think that that perspective, um, really has helped grow our business and has helped our managers create opportunities, um, you know, using the skill sets that they have.
Without that perspective, it's just like I ... You know, you can be the best asset manager in multifamily in the world, but you have no idea how your portfolio or your assets are impacting an overall strategy. And so I think that that lens does help our managers understand why we're making some of the recommendations that we're making for their organizations.
Ryan Swehla: Yeah, and we've also seen this, you mentioned multifamily manager. Uh, we, we've also seen this kind of shift or- Yeah ... maybe increasing focus on niche and specialized real estate strategies. Uh, obviously when we first started together and we used the word secondary and tertiary markets, that was kind of like a four-letter word in the institutional consulting space.
We're working on that, uh, as we speak. But, um, what would you say a- to, uh, real estate managers in terms of this move toward kind of niche or specialized strategies and how, uh, how one differentiates themselves in that space?
Jen Stevens: It's a great question. I firmly believe that, um, having specialty and having, um, having a very defined approach Creates a better outcome for investors.
So I believe in specialization, I believe in property type allocation, but there's a time and a place for an allocator and a time and a place for an operator. In a very uncertain environment, uh, with limited capital availability, investing alongside an allocator who has a good performance track record is not a bad approach for investors that need to have exposure to vintage, but might not know exactly where to put it.
So they're deferring those allocation decisions to a skilled manager to do that on their behalf. Um, I think that every portfolio to drive alpha, so I think allocators are really great for driving beta And operators are the ones that are really creating some operational alpha for portfolios, and I think that will be required going forward.
You see even the build-out of some of these large organizations on the investment management side, um, becoming incubators for operators, uh, that are skilled in a certain area. And so I think we'll see more of that going forward, but there will always be a place for core real estate, kind of your keel in the water, diversified positions in a portfolio, and then specialists that can really drive operational alpha at the asset level.
Operators, in our opinion, um, they are able to source different deals. They have a different, uh, sourcing network oftentimes than an allocator might. Um, you can eliminate some overhead or fees that are associated with the allocator model. Uh, I truly believe that operators can drive operational efficiencies and lead to NOI growth at the asset level.
And so I do think that that tract will continue. In terms of, like, secondary and tertiary exposure versus primary exposure, it all depends on the property type. A market that's secondary, um, in multifamily might be a primary market for, uh, uh, industrial. So- Yeah ... I think we, we have done ourselves a little bit of a disservice to bucket things so specifically, um, in terms of geography, uh, perhaps.
But, uh, there is a really important, uh, part that a liquid market plays in a portfolio, which creates exit opportunity and sort of a, a more competitive stance for buyers that might bid on assets for sale. So I do think that there's merit in really assessing, uh, primary, secondary, and tertiary, but it's not to say that primary market is the only market investors should ever invest in.
They should always, you know, be here or there. It's just how you fit within a portfolio might change based on their existing composition.
Ryan Swehla: Real estate kind of is a bifurcated market in the sense that there is this co- the core real estate, which is long-term hold, ownership, cash flow orientation, which is almost a different asset class, certainly a different portfolio characteristic, than private equity real estate, whether that's value add or opportunistic.
And I also wonder in this conversation th- that we're talking about how th- th- those two buckets Maybe are separated over time or how they- they're treated differently because obviously the characteristics of private equity real estate is much more analogous to kind of a lower risk version of private equity, um, and a lower returning, you know, version.
But the, uh, the portfolio characteristics of kind of core long-term hold real estate, very different.
Jen Stevens: Right. So core, core real estate in a well-diversified portfolio, um, served as a, um, not only a diversifier to other asset classes, um, but a strong income generator. The historical return for core real estate was two-thirds income return, one-third appreciation.
That was the makeup of the total return. Um, we saw that, um, inverted in the last 15 to 20 years, um, where it was more like one-third income, two-thirds appreciation, and that had to do with a lot of capital flows coming into the space, um, and growth that was, um, achievable in rent and, um, you know, some cap rate compression that we witnessed.
And I think that, um, that is still possible, um, and I do think core real estate is, is an income producer for our portfolio, so there should be an element of stabilized real estate. But we are seeing some as- asset allocation models come out of the consultants, um, uh, today that bring core real estate down in a portfolio from maybe a 5 or 6% level to 3 to 4%, and that's offset either in, uh, in value add and opportunistic real estate, or it's going to infrastructure And so I think what we have here, Ryan, is, you know, a little bit of a structural shift in how real estate fits in a broad portfolio.
And I see a migration toward real estate really being part of a real assets allocation and maybe that weighting coming down a bit, versus real estate separate from infrastructure and other private real assets. I do think we're gonna see a, a shift in that way. Um, it will come at the cost of likely some exposure to core real estate, um, and the beneficiary will be most likely, um, maybe a higher credit allocation or, um, infrastructure allocations rising.
Ryan Swehla: Yeah, certainly. Uh, and we've seen that, uh, with the LPs that we interact with, both of those two scenarios, one where real estate and real assets are being combined under one umbrella, and then that movement out of core real estate and then into more value-add opportunistic. Because a- again, I, I would kind of make the argument that, uh, you know, real estate in the kind of value-add private equity space has very different portfolio characteristics, and if you understand those, um, then it, it is, uh, it's certainly an alpha generator and a return generator in the portfolio versus just kind of a diversifier.
Yeah,
Jen Stevens: and it can be also an income producer too, right? So, um, so it can have those characteristics. And, um, I think, I think value-add and opportunistic real estate, um, you know, belongs in a, in a diversified portfolio as well as core. Uh, it's just... I, I asked one of my former colleagues this question, um, a couple months ago, prior to year-end '25.
I said, "What makes it such a good time to buy non-core real estate and such a bad time to think about going back into core?" Because in 2019, my clients at Townsend made a lot of money by reallocating to core And investing at what they felt was an over-corrected bottom of the market. And it wasn't a marking t- Mm-hmm
market timing issue, it was just where can you achieve better risk-adjusted return? And the answer at that time was, we felt we- they could get to 10 to 13% returns with core real estate. And that is no longer true, and I think it's highly influenced by limited growth, uh, and also by the debt capital markets, again, not being as favorable when applied, um, financing to real estate as it was in the last 20 years.
Ryan Swehla: So and how would you say, or would you say that, uh, an investor's ability to be tactical, um, has changed in those 20 years? Because I'm also thinking about kind of gating of capital and inability to be in the market when you want to. I- would you say that that dynamic's different today than it was 20 years ago, or during the, you know, the bottom of the GFC?
Jen Stevens: I think it is changing. Um, it changes slowly, um, for some investors and more quickly for others. So, um, I do think it's changing in that investors have lessons learned coming out of the global financial crisis about the importance of vintage year diversification in their portfolios. So they, they are being more tactical, and they're able to execute on more finite and niche-y strategies as well as, um, maintain deployment, at least, um, modest deployment.
It might... Their, their deployment has been curbed because of the denominator first, and now there's a lack of return of capital in the non-core space, so they're not getting money back from their real estate managers. It, it's been curbed, so they haven't been putting out new dollars, but there was a, an excess amount of capital sitting in unfunded commitments that had already been made to non-core managers.
So, um, I think the market felt like there was no ability to transact, but really, there were billions and billions of dollars of capital sitting unfunded and uncalled in these portfolios. So the investors themselves were probably in okay shape to maintain some vintage year diversification through the managers they selected.
So I do think their ability to act more tactically is changing. It's better. Um, again, a biased view. I sat on the consultant side. It's better- Having, um, a bigger extension of staff that can help you identify opportunity and underwrite opportunity and think about asset level opportunity versus fund level opportunity.
So I do believe it's better to have a skilled investment team that supports your ability to invest tactically. Um, and I think that this notion of capital in our space changes because the capital providers are different. So it's no longer just US institutional LPs that you're gonna find in your strategy.
It is a changing capital base that includes high net worth, uh, registered investment advisors, sovereign wealth funds, foundations and endowments. Some of this capital looked a little bit similar in the last 20 years, and some of it looks totally different. And we, we are firm believers that every manager should be thinking about the private wealth channel and how to position their growth strategy to accommodate private wealth, which we believe will end up being a very strong capital provider in our space.
So I think investors, um ... the capital base is changing. Investors are becoming more tactical. One thing I'd like to see improve is, like, I do think there is this need for more liquidity, like more liquidity in the marketplace, whether it's core or non-core. And so I love the evolution of the secondary markets for this, but I find that very few investors can transact on the secondary markets without a, you know, a, a manager in place that can do that on their behalf or a consultant that can opine on that on their behalf.
And so I think the more real estate transitions toward a private equity model and gets more comfortable with the secondary markets, um, the better. I was on a, a call yesterday with, um, a leading secondary manager, and they said, like, "Jen, the reason it's not there is because in private equity, investors are only r- underwriting to, like, a 10% spread."
In real estate, you know, in the last year spreads in core have been 50. You could buy core positions at 15 to 50 basis point, um, you know, or 50... 15 to 50% off of the prior carrying market value. And so his point to me was, like, the spreads in real estate feel really uncomfortable compared to a private equity spread where you're thinking like, "I'm not gonna get a good or bad deal, but I might get some liquidity out."
So I think that has, um, a lot of merit and ha- I hadn't thought about things in that way.
Ryan Swehla: Yeah, a- absolutely. And i- it... The, the other interesting dynamic is, uh, I would say 20 years ago, the broad, uh, movement of institutional capital was increasing or growing allocation into real estate, so you had kind of this perpetual flow of, uh, you know, slowly moving up to their target allocation.
And it certainly seems that today on a broad basis, investors have kind of gotten at their target allocation. Maybe in some cases they're reevaluating that down. Um, and so it is a, it is a different capital flow environment in that it's, these are mature portfolios, and it's requiring, um, the ability to have funds coming out to have funds going in to the next investment.
Jen Stevens: When you have mature portfolios also, so most, most investors... Townsend launched, um, its business in 1978, and I, I kind of think that that's kind of the beginning of the index too, the Odyssey index. So I think about that as like the inception of real estate being welcomed in an institutional portfolio. Um, most of the public pension plans or institutional investors as we thought of them are- were already at 8 to 10% real estate allocation, right?
So they're already mature, which I think lends itself to the ability to take that portfolio and allocate more risk to it, which is, you know, why we may be seeing some opportunity flow to the non-core side of things. So I think it's a, um, it's a really good point, the maturity of the space. It is not mature in private wealth.
The real estate allocation in private wealth, because of its illiquidity, is really, like, less than 3% of total allocation. We expect that will grow because of the merits of real estate in a, a broader portfolio as well.
Ryan Swehla: You know, uh, going back to the, the Townsend analogy and, you know, Paul Dolan, I- sits on our advisory board and on yours as well, and he talks about when Equitable first started kind of pitching public pensions on real estate, which seems mind-boggling that they...
He, he, you'd have to educate them why real estate should even be in the portfolio. We're kind of almost at those early innings with the private wealth space. It's, it's not uncommon that either we are educating advisors or firms, um, about where private real estate fits and what private equity real estate is, and it's not uncommon that even within the firms, kind of the research people are having to educate the advisors who are also having to educate the clients in that process.
So I, I agree with you wholeheartedly. We are in really ear- early innings of that. Obviously, because you have to have a certain level of liquidity to feel comfortable, you know, the, the space is never gonna be a 7 to 8% allocation. With family offices it's much higher but with, uh, you know, kind of the mass affluent, it'll never get to that point.
But because there are so much dollars in that space, it does represent a, a real opportunity that, yeah, we've been focusing on. I'm curious, uh, you know, what, what have you guys seen in that space, the wealth management space, and how have you guys been able to help clients in that space?
Jen Stevens: Um, so about two years ago, um, we, we were seeing some of these capital flows that you just described.
Um, and also we agree with you that there's more education needed in, in that space, whether it's to the RIAs, um, or to the underlying investors that are supporting those RIAs. Uh, and, and we felt like it was a massive opportunity for us, and also a gap in our expertise because, um, I did manage a couple of, um, high net worth client portfolios when I was at Townsend.
But they, those, those portfolios, the family offices that I was responsible for, they were larger than some of our county pension plans. I mean, they were multifamily offices, very large, um, wealth aggregators, and they had, um, also immature portfolios, but a specific need because of the composition of their capital to invest here or there in real estate.
So, um, we recognized that despite that limited exposure to private wealth that we've had over the years as a team, that our team would benefit from more, uh, resources and dedication to like a pillar that was, that was strictly oriented toward private wealth. And so, um, for that reason, we have been building out our expertise in private wealth.
Um, we hired a gentleman, um, by the name of Kurt Edwards. Kurt and I worked together at the Townsend Group for a period of time, but he went on to do great things at organizations like Fortland and UBS, um, where he helped to put products on the shelf for their wealth management clients. And that level of, um, knowledge, lessons learned, and, um, expertise is required for us to be well-suited to advise our clients on how to tackle this space.
Not only that, we designed our team to have a very deep, uh, uh, expertise in capital markets and fundraising. It is not, again, not my area of expertise. You may wonder like, "Where are your areas of expertise if not in these places that are important to your clients?" Uh, I guess it's- Highly ... also to become less important over time, right?
But capital markets- Yeah ... is central to everything that our clients do, you know, because you were out raising capital for- Yeah ... your fund. And, um, we had to help educate- Mm-hmm ... um, organizations that we were working with on who the capital base is, what their portfolios look like, how to pitch their strategies to those portfolios, what would resonate, which, what won't resonate.
Um, and, uh, so our team has significant expertise in capital markets distribution and global distribution to include private wealth, institutional capital, and many of the, these other sources. So, um, where we had weaknesses in our team, we built out, um, we have, we have 14 people on our team today. Um, and our team is exceptionally well-positioned to advise on any of these facets of distribution, private wealth, strategy, new product development.
Ryan Swehla: That's great. And kind of, uh, double-clicking on that, uh, let's go, let's move to, uh, how you see emerging managers, uh, positioning themselves in the marketplace. The two areas that I think, uh, we hear a lot about but would be, be great to get your feedback on, one is alignment. How do emerging managers build stronger alignment with the G- the LPs that they invest with?
And then t- uh, tiering off of that, you know, what do you see in the areas of transparency and governance, um, where emerging managers can grow and improve? So alignment and then transparency and governance.
Jen Stevens: Uh, on, on alignment, so this is not, this is not a conversation for emerging managers, by the way.
Right? What you're talking about, alignment, transparency, um, build out of a team, a high caliber team, and earning the, the respect and confidence of your investors is absolutely central to any manager's success, regardless of size. What I find in the emerging manager space, and to me, um, we classify emerging managers at, with a size threshold, AUM threshold, um, not a different threshold.
And so typically when we're defining that, it's under a billion dollars in assets under management, and, um, some investors are 2 billion. Um, it just happens to be our, our definition. And many of those managers are skilled operators and developers that haven't yet managed a considerable amount of institutional capital.
And what happens when you manage institutional capital is that everything comes under the microscope. These are public funds in many ways. So, um, you, you as a manager, your information is reported up to a board that's comprised of elected and appointed officials, and a lot of this information becomes private despite efforts to keep some, you know, some privacy...
Or sorry, becomes public-
Ryan Swehla: Becomes public, yeah ...
Jen Stevens: uh, despite efforts to keep some privacy, um, in the underlying assets that you're managing. So, uh, I think transparency is required by any manager, and that means, um, transparency to me means be- being very open and honest with your investors about what's going well and what's going poorly in portfolios that may impact their outcomes to the positive or to the negative.
And making sure that your investors hear from you first. They don't read it in the press. They don't get it in a memo. They hear from you first where their daily operations may be impacted or questioned, so that they're poised to answer questions that come to them. And so I think transparency is, um, is required.
I think there's also a discussion to be had about transparency and valuations and cash flow and distributions that is often difficult to predict. And I think investors realize it's difficult to predict, but having more clarity helps them, uh, make better decisions, and so there's that element of transparency.
Alignment of interest, to me, can be related to economics And it can be related to other policies and procedures that make sure that the capital is in the hands of good stewards and good fiduciaries. And so alignment of interest to me means, um, making sure that your, your team, Ryan, is incented, um, and retainable, right?
So making sure that your compensation structure as a team is going to ma- is going to allow for those that are impacting performance in a positive way to stay with your organization and carry that forward. I also think that there's alignment of interest in fee structures that are charged to investors.
Um, and, uh, there's a recognition that emerging managers do need to make money. Um, and it's a, it, it can be challenging. It can take seven to 10 years to be cash flow positive in the emerging manager space. We all know that. I think that's why we're seeing a lot of influx of entity-level capital coming into the space.
It's needed, um, to facilitate growth for some emerging managers. And, uh, investors are pretty aware of the types of risks that can be present if they're not mindful of alignment of interest. So I think it, it starts with policies and procedures, and I hate to say that 'cause it sounds so generalist to say, but it means like, have you thought about succession planning?
You're a young organization, highly skilled, um, team. Have you thought about that though? You know, have you named successors in key p- pieces or places in your business so that the business functions beyond you? Um, have you structured the compensation of those individuals appropriately? Do you have checks and balances within your investment committee to make sure that your decisions are not misguided by, um, retaining assets under management, right?
So there are all of these elements that go into alignment of interest that I think are of key importance, and that's what we as a firm do. We put pen to paper on policies and procedures for managers. If you don't have an investment committee charter, we help you write it. If you don't understand why a key person provision is necessary and what investors expect, we will draft one alongside your counsel for your PPM.
And so our team is really structured to be an extension of staff to help you get through some of those things that you just might not have in your toolkit quite yet as an emerging manager.
Ryan Swehla: And, and of, of course, it's reminding me of all the things that you guys did for us, uh, when we first engaged with you guys.
Uh, so we're kind of getting toward the, uh, the, the end of our podcast here and, and I always like to ask, you know, you, you've had a, a particular career trajectory which has been, uh, wonderful and, and hyper value for our industry. Um, what you guys do is, has just been, um, a, a very needed void within the space.
But let's go back to 22-year-old Jen Stevens, and what advice would you have for people, whether they are gra- just graduating from college and wanting to enter the industry, or they're younger in the industry, maybe three to five years in the industry? What advice would you have for them?
Jen Stevens: So I, I love this industry.
I loved my time at Townsend. I, I felt I had something more to give to the industry than I could have given when I was at Townsend, which is why I launched this business alongside Heather in 2020, and I had a desire to be impactful. And so for me, um, I think my advice to my younger self, what would be to, like, just stay true to who you are and what you want to accomplish.
I... You know, when I graduated from college, I went to Ohio University. Go Bobcats. Um, great school. Loved it. Um, when I graduated, I wanted to go to law school, and I wanted to go to law school. Um, I took the LSAT. I bombed the LSAT. I didn't get into my stretch schools, and so I went to Townsend. Um, and I thought, "This will be a gap year."
But I think back to, you know, what's really important to me, and what's important to me is making sure that people, and now firms, have equal opportunity to compete, um, for whatever it is they're trying to compete for, and that access is not restricted. And I wanted to be a civil liberties at- attorney.
That's what I would've wanted to- wanted to do. But I probably would've ended up in M&A, 'cause I wanted to make some money, right? I like- Yeah. But in my heart of hearts, what's- Yeah ... what I'm passionate about is making sure that people and firms and, um, you know, everybody has the opportunity to succeed. And so what I would tell my younger self is that it is possible to do both, right?
To marry your personal, um, values with your business and to create an outcome for your life that is designed as such. So that's one thing an ent- being an entrepreneur has taught me. Um, the other thing I would say for our industry specifically is that I think people often underestimate the importance of being close to the capital So it's not a glamorous position to sit in the consultant seat.
You're often the scapegoat. You know, you're blamed when things go wrong. You're never given credit when things go right. Um, but you have a job and, and you always remember that you're serving an investor that likely is a fire and police pension plan or public pensioners that are, like, teachers and, uh, public servants that have dedicated their lives to, um, to that service.
And I think that when I think about our business as a whole and our industry, that people often just, like, wanna make a ton of money. Like, they wanna be on development. They wanna be on the... They wanna go work for a big firm, um, a brand name. And so there is a lot of opportunity there. Um, but what I will say has afforded me the best opportunity is understanding and being close to the capital, right?
And really thinking about how that shaped my career, I don't... I, I wouldn't have recognized that as 22-year-old Jen sitting in Cleveland at a cubicle doing work. It kinda like, you know... I, I, I don't think I recognized that then, but I do recognize it now, that it has really been the foundation of my career, and I was lucky enough to work with some terrific clients that, you know, had a, a confidence in me to succeed and represent their programs.
And those relationships are very meaningful, and I hold them very close, um, uh, as well, and so I don't exploit them. Uh, and that's the other thing that I would say is, like, just be a good networker, be a good person, do the right thing, and, um, success will, will follow.
Ryan Swehla: Yeah, and, uh, you know, the... You said be close to the capital, and in many senses, that could be drawn to a broader net- net, which is be close to the customer.
Jen Stevens: Yes.
Ryan Swehla: You have a... You have an ear when you are close to the customer because a lotta times we forget when we're in business that our business survives because we are meeting the needs of the customer, and the moment that we forget that or the moment that wealth accumulation or whatever else is driving that, um, dri- drives you away from the needs of the customer, that's where you, you see risk.
Um, and yeah, I, I couldn't agree more. Uh, be close to the customer.
Jen Stevens: Yeah, and I also think, um, in speaking about- Like leveraging brand. I, I mean, I work for, I, I think Townsend is one of the best brands in the, the marketplace. They represent the, you know, some very blue chip client capital. Um, and I, I think I realized when I moved to California, when I left headquarters in Cleveland and moved to California, I didn't know anybody.
I didn't have a network in California beyond work. And what I was able to do was sort of build that network and friendships in our industry because that's sort of all I had. And what it became was my own personal brand. Like, I had a brand beyond the wonderful brand that Townsend probably, you know, provided to me.
And so I think people, you know, should think about that if they have any desires to do things differently in their career, and, and really not, not abuse the brand that you also represent, but still, like, think about who you are as a person and how that, you know, f- filters into your daily work and all of those items.
So the other piece of advice I would give is to, you know, try to build a personal brand beyond your employer, um, over your years.
Ryan Swehla: Well, Jen, this has been incredibly insightful, and I appreciate you taking the time with us today.
Jen Stevens: Yeah. Thank you so much. I'm so incredibly proud of your success. Uh, we're asked all the time, you know, "How do your managers quantify success w- in working with Alliance?"
And we're so quick to say, like, "We're not responsible for your success. You're responsible for your success." So I truly believe that, um, but this has been a real privilege to watch your growth, um, kind of culminating with this large institutional capital commitment recently that's gonna, um, change the trajectory of your business, and we're so proud to have worked with you, and thank you for taking a chance on us when we, um, didn't know one another and launched our business back in 2020.
You were one of our first clients, and, um, will always hold a special, uh, place to us. So thank you.
Ryan Swehla: And, and the same goes back to you. Thanks for taking a chance on us.
Jen Stevens: Yeah.
Ryan Swehla: Of course. And thank you for taking time today. Thank you.
Jen Stevens: You're welcome.
In this episode of Durable Value, Ryan sits down with Jen Stevens, co-founder and managing partner of Alliance Global Advisors, to discuss what it takes to build an institutional-caliber real estate investment firm. Jen shares her 17-year journey at the Townsend Group, the founding story of Alliance, and how they've helped over 50 real estate managers — collectively overseeing a trillion dollars in assets — compete and grow. From emerging manager strategy to private wealth distribution, alignment of interest, and career advice, this episode is packed with insight for anyone in the real estate investment industry.
0:00 – Introduction: Meet Jen Stevens & Alliance Global Advisors
0:49 – Jen's career begins at the Townsend Group (2004)
2:50 – The founding of Alliance Global Advisors in 2020
3:56 – What Alliance does: Advising GPS to become better partners
5:54 – 50+ managers advised, over $1 trillion in AUM served
7:27 – Pennsylvania PSERS commits $90M to Fund IV: A milestone moment
13:05 – The case for specialization in real estate strategies
16:01 – Core vs. non-core real estate: Understanding the bifurcation
16:52 – How core real estate fits (and is shifting) in institutional portfolios
21:12 – Lessons from the GFC: Vintage year diversification & tactical investing
23:06 – The changing capital base: Why every manager must think about private wealth
26:16 – Private wealth real estate allocation: Still in early innings
29:21 – Building Alliance's private wealth expertise: Hiring Kurt Edwards
31:39 – Alignment, transparency & governance for emerging managers
33:21 – What true transparency looks like with institutional investors
34:28 – Alignment of interest: Compensation, succession planning & investment committees
37:59 – Career advice: Stay true to your values and your purpose
39:30 – The power of being close to the capital (and the customer)