Domain Capital Group has acquired Simpson Housing, the 75-year-old multifamily developer and property manager, from the State of Michigan Retirement Systems, ending a 29-year institutional partnership and positioning the Atlanta-based firm to expand what it describes as a deeply vertically integrated operating platform. SMRS originally invested in Simpson in 1995 and took full ownership in 2018 before exiting the investment this year. The pension system has retained roughly $2.3 billion in assets that Simpson will continue to manage.
Domain, which has served as Simpson's investment advisor on behalf of SMRS since its founding in 2008, is now transitioning from advisory oversight to direct ownership. The firm's founders had worked with the real estate company prior to 2008. The acquisition expands Domain's role and sets the stage for what executives characterise as the next phase of the platform's institutional evolution.
As part of that expansion, Domain has hired Jason Kern, a 30-year veteran of the real estate investment world, as president and chief investment officer of Simpson Housing. Kern will lead the platform's investment strategy, portfolio and asset management, and transaction execution, as well as support Domain's capital formation team in bringing new institutional opportunities to market. Kern was most recently president of investment management at Cortland. Previously, he served as CEO of the Americas for LaSalle Investment Management, leading a business with approximately $24 billion in assets. Earlier in his career, he held senior real estate advisory and investment banking roles at HSBC and J.P. Morgan.
Kern told Institutional Investor that his appointment marks the next logical step in the strategy behind Domain acquiring Simpson. He said he is not at the firm to replace anyone or fix anything that is broken, but rather to expand the platform. According to Kern, Simpson has been quietly providing a deeply vertically integrated operating platform of investment management capabilities for a group of large, sophisticated institutional investors longer than almost anybody. The intention now is to make that offering available to new capital partners and grow assets under management.
Simpson currently employs a staff of 640 overseeing 24,000 units spread across 21 markets in 15 states in the United States, valued at roughly $7.5 billion. Kern's appointment is intended to build on existing institutional partnerships and develop new investment offerings that combine Simpson Housing's operating capabilities with Domain's investment management platform.
Kern explained that there are real benefits in adding scale to the multifamily operating business, and emphasised his conviction in the sector's fundamentals. He said multifamily has a pervasive undersupply issue, noting that there is not enough housing in the United States and that it is difficult to buy a house, so housing rentals continue to be in strong demand. He added that multifamily is also a great diversifier and inflation hedge.
The institutions that quietly compound capital through rough cycles are the ones still passing on the obvious trades, family office advisor Jaf Glazer has argued.
The veteran allocator also pointed to cyclical timing as a tailwind for the next few years. The sector has been beat up over the last few years with the double whammy of higher interest rates and the supply response that multifamily developers had, which had a negative impact, he said. All of these factors should provide valuations with attractive entry points for global and U.S. institutions, according to Kern.
The move comes at a time when other real estate managers see opportunities in student and senior housing. Christopher Merrill, co-founder and global CEO of the student and senior housing specialist Harrison Street, told Institutional Investor earlier this year that this is the time when you need hard assets in good and bad times. Josh Pristaw, president of Clarion Partners, also sees housing as providing strong, long-term return potential. Pristaw said that things like apartments or homes cannot be disintermediated by AI, and that people still sleep in beds.
Domain's acquisition of Simpson and the installation of a senior institutional executive with a track record at LaSalle and Cortland suggests the firm is preparing to compete for allocations from pensions, insurers, and sovereign wealth funds that historically accessed multifamily through separate-account or co-investment structures. The retention of $2.3 billion in Michigan pension assets under Simpson's management provides a stable revenue base as the platform courts new limited partners. Whether family offices with appetite for direct real estate operating exposure will find the expanded offering compelling remains an open question, particularly as the firm seeks to balance its legacy institutional relationships with a broader capital-formation strategy.