Colony Capital, the $44 billion firm that has seen its market value cut almost in half this year, plans to pivot to asset management in what amounts to a repudiation of the company’s calamitous 2017 merger with real estate investor NorthStar.
“The growth is in the asset management, investment management portion of the business,” founder Tom Barrack said in a Bloomberg Television interview on Thursday. “With $2bn of liquidity in these equity markets, leveraging that for third-party capital and fees is exponentially better.”
Barrack resumed his role as chief executive on Wednesday after Colony’s board ousted longtime deputy Richard Saltzman as chief executive. The moves follow a tie-up with NorthStar that swelled Colony’s balance sheet while failing to generate a corresponding increase in earnings. A long-time ally of President Donald Trump, Barrack spent much of the 2016 campaign and the months following Trump’s inauguration as a frequent television guest defending his close friend.
The merger with NorthStar ended up being “much more complicated” than Colony anticipated, Barrack said. “We just missed it.”
Much of the problem stems from the “deceptive” nature of the return on assets the company holds on its balance sheet, Barrack said. “Sometimes it looks as though it’s return on capital, but it’s return of capital,” he said. “So you have to go to a more actively managed format, and for us that’s asset-light.”
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Read more:
[ Abraaj liquidator is said to consider lower Cerberus offer over Colony bid ]
[ Abraaj agrees to sell big chunk of its fund business to Colony Capital ]
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Barrack believes that sovereign-wealth and pension funds are eager to invest alongside Colony. Barrack has recently done deals with wealth funds in Saudi Arabia and the United Arab Emirates.
The company also could deploy its existing cash to “take positions in value-added product, create a magic elixir over fixing that or creating better value, and sell those pieces off to third-party investors,” he said.
Colony’s shares have fallen 46 per cent this year, and more than 55 per cent since Trump’s January 2017 inauguration. The decline in the company’s stock price represents “a great opportunity for me,” Barrack said on Thursday.
ROUTE TO TITLE
Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2
SPECS
Engine: 4.0-litre twin-turbo V8
Power: 750hp at 7,500rpm
Torque: 800Nm at 5,500rpm
Transmission: 7 Speed dual-clutch auto
Top speed: 332kph
Fuel consumption: 12.2L/100km
On sale: Year end
Price: From Dh1,430,000 (coupe); From Dh1,566,000 (Spider)
Company profile
Name: Fruitful Day
Founders: Marie-Christine Luijckx, Lyla Dalal AlRawi, Lindsey Fournie
Based: Dubai, UAE
Founded: 2015
Number of employees: 30
Sector: F&B
Funding so far: Dh3 million
Future funding plans: None at present
Future markets: Saudi Arabia, potentially Kuwait and other GCC countries
Match info
Uefa Champions League Group C
Liverpool v Napoli, midnight
Signs of heat stroke
- The loss of sodium chloride in our sweat can lead to confusion and an altered mental status and slurred speech
- Body temperature above 39°C
- Hot, dry and red or damp skin can indicate heatstroke
- A faster pulse than usual
- Dizziness, nausea and headaches are also signs of overheating
- In extreme cases, victims can lose consciousness and require immediate medical attention
Bridgerton season three - part one
Directors: Various
Starring: Nicola Coughlan, Luke Newton, Jonathan Bailey
Rating: 3/5
Diriyah project at a glance
- Diriyah’s 1.9km King Salman Boulevard, a Parisian Champs-Elysees-inspired avenue, is scheduled for completion in 2028
- The Royal Diriyah Opera House is expected to be completed in four years
- Diriyah’s first of 42 hotels, the Bab Samhan hotel, will open in the first quarter of 2024
- On completion in 2030, the Diriyah project is forecast to accommodate more than 100,000 people
- The $63.2 billion Diriyah project will contribute $7.2 billion to the kingdom’s GDP
- It will create more than 178,000 jobs and aims to attract more than 50 million visits a year
- About 2,000 people work for the Diriyah Company, with more than 86 per cent being Saudi citizens
The Saudi Cup race card
1 The Jockey Club Local Handicap (TB) 1,800m (Dirt) $500,000
2 The Riyadh Dirt Sprint (TB) 1,200m (D) $1.500,000
3 The 1351 Turf Sprint 1,351m (Turf) $1,000,000
4 The Saudi Derby (TB) 1600m (D) $800,000
5 The Neom Turf Cup (TB) 2,100m (T) $1,000,000
6 The Obaiya Arabian Classic (PB) 2,000m (D) $1,900,000
7 The Red Sea Turf Handicap (TB) 3,000m (T) $2,500,000
8 The Saudi Cup (TB) 1,800m (D) $20,000,000
MATCH INFO
Juventus 1 (Dybala 45')
Lazio 3 (Alberto 16', Lulic 73', Cataldi 90+4')
Red card: Rodrigo Bentancur (Juventus)
SPECS
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
The biog
Occupation: Key marker and auto electrician
Hometown: Ghazala, Syria
Date of arrival in Abu Dhabi: May 15, 1978
Family: 11 siblings, a wife, three sons and one daughter
Favourite place in UAE: Abu Dhabi
Favourite hobby: I like to do a mix of things, like listening to poetry for example.
Favourite Syrian artist: Sabah Fakhri, a tenor from Aleppo
Favourite food: fresh fish
Jawab Iteiqal
Director: Mohamed Sammy
Starring: Mohamed Ramadan, Ayad Nasaar, Mohamed Adel and Sabry Fawaz
2 stars
MATCH INFO
South Africa 66 (Tries: De Allende, Nkosi, Reinach (3), Gelant, Steyn, Brits, Willemse; Cons: Jantjies 8)
Canada 7 (Tries: Heaton; Cons: Nelson)
THE SPECS – Honda CR-V Touring AWD
Engine: 2.4-litre 4-cylinder
Power: 184hp at 6,400rpm
Torque: 244Nm at 3,900rpm
Transmission: Continuously Variable Transmission (CVT)
0-100kmh in 9.4 seconds
Top speed: 202kmh
Fuel consumption: 6.8L/100km
Price: From Dh122,900
Top 10 most competitive economies
1. Singapore
2. Switzerland
3. Denmark
4. Ireland
5. Hong Kong
6. Sweden
7. UAE
8. Taiwan
9. Netherlands
10. Norway
THE SWIMMERS
Director: Sally El-Hosaini
Stars: Nathalie Issa, Manal Issa, Ahmed Malek and Ali Suliman
Rating: 4/5
The biogs
Name: Zinah Madi
Occupation: Co-founder of Dots and links
Nationality: Syrian
Family: Married, Mother of Tala, 18, Sharif, 14, Kareem, 2
Favourite Quote: “There is only one way to succeed in anything, and that is to give it everything.”
Name: Razan Nabulsi
Occupation: Co-founder of Dots and Links
Nationality: Jordanian
Family: Married, Mother of Yahya, 3.5
Favourite Quote: A Chinese proverb that says: “Be not afraid of moving slowly, be afraid only of standing still.”
Tour de France 2017: Stage 5
Vittel - La Planche de Belles Filles, 160.5km
It is a shorter stage, but one that will lead to a brutal uphill finish. This is the third visit in six editions since it was introduced to the race in 2012. Reigning champion Chris Froome won that race.