US investor Fortress said this week that it has entered into a definitive agreement to become general partner and manager to Colony’s CDCF series of funds, co-investment vehicles and other real estate positions, representing $2.7 bn in combined assets under management.
Under terms of the agreement, Fortress is to pay $535 mln (€438 mln) to acquire the portfolio which encompasses over 100 properties in Europe and the US. The sales price is in line with the net equity carrying value of the underlying assets as of March 31, 2021.
The transaction is in line with Colony’s strategy to reduce organizational complexity and refocus on its fully-digital business. The so-called Other Equity and Debt (OED) portfolio is diversified by investment type (senior debt, junior debt and equity), underlying asset class (office, hotels, land, multifamily), geography (U.S., Ireland, Spain, UK and France) and underlying industry (real estate, securities, energy).
‘We are thrilled to announce this win-win transaction with Colony and look forward to serving new limited partners as we work to maximize value across a diverse portfolio,’ said Fortress Managing Director Noah Shore. ‘This business and its underlying assets fit perfectly with our existing business and our deep wells of experience and expertise in managing highly complex investments across a full range of asset types, structures, industries and geographies.’
The transaction is expected to close in the fourth quarter of 2021.
‘This transaction is a watershed moment for us, a big step towards our Finish-The-Mission goal as we rotate to a fully-digital business. Not only are we freeing up over a half-billion dollars to redeploy into digital, we’re simplifying our business, making it easier to manage and to understand,’ said Marc Ganzi, President and CEO of Colony Capital.
The news comes hard on the heels of Colony’s announcement last month that it is teaming up with Liberty Global to launch a new joint venture focused on the development of Edge data centres in Europe.
