Alaska’s mineral royalty investment fund will share a controlling interest in Denver- based Simpson Housing Limited Partnership LLLP under a nearly $1 billion deal announced Monday.
The Alaska Permanent Fund Corp. will purchase a co-controlling interest in the apartment developer and manager from Mountain West Holdings LLC, part of the State of Michigan Retirement System. Mountain West has owned more than 90 percent of Simpson Housing since forming a partnership with the company in 1995.
The two funds will share control of the company under terms of the deal, which is expected to close in March. The price wasn’t disclosed, but the companies said the transaction values Simpson at more than $2 billion.
Simpson employs 1,000 people, including 300 in Colorado. Its headquarters is in the Denver Technological Center.
“It’s a very amicable partnership,” said Patrick Leardo of PricewaterhouseCoopers, which has advised the Michigan system since its initial investment in Simpson. “We expect nothing but positive things.”
Simpson’s Denver roots stretch to 1948, when Harold Simpson founded Simpson Housing Corp. His son Donald took over as chief executive in 1995. J. Robert Love, formerly of the Michigan system, took over as chief executive in 1998. Donald Simpson remains chairman.
Simpson Housing attempted to go public in 1994 but withdrew when the market for real-estate investment trusts dried up. Instead, the company partnered with Mountain West to form Simpson Housing Limited Partnership in October 1995. The company is among the country’s largest privately held apartment developers and managers.
The deal with the Alaska fund will give Simpson the capital to expand, Love said.
“This will allow Simpson to get active in the development business again. And if the acquisition market comes back, we will be acquiring” new apartments, he said.
The $33.5 billion Alaska Permanent Fund was created in 1976 to invest 25 percent of the state’s mineral royalties. The Simpson deal is the fund’s largest real-estate acquisition.
“This was an efficient way to acquire a large, diversified stake with good management in place,” said Mike Burns, executive director of the Alaska fund.
Simpson owns 19,241 market-rate apartment units in 34 states. Its affordable-housing business, Simpson Housing Solutions LLC, has 9,000 units of affordable housing.
Staff writer Kristi Arellano can be reached at 303-820-1902 or karellano@denverpost.com.
