Tom Barrack Returns to CEO Role at Colony Capital After Shares Fall
(Bloomberg) -- Tom Barrack, who founded a Colony Capital Inc. predecessor and stepped down as chief executive officer in 2014, is returning to the role following a stock rout that’s cut the investment firm’s market value in half this year.
Former CEO Richard Saltzman has resigned from the position and given up his board seat, Colony said in a statement Wednesday. He’ll remain non-executive chairman of both Colony Credit Real Estate Inc. and NorthStar Realty Europe, which have ties to Colony Capital.
Barrack’s decision to return to the CEO position at Colony, where he’s been executive chairman, comes as his close friendship with President Donald Trump threatened to overshadow the $44 billion money investment firm he founded in 1991. One of Trump’s most prominent allies in the investment and real estate communities, Barrack became a television regular during Trump’s 2016 campaign as his role at Colony appeared to diminish.
Saltzman, one of Barrack’s closest deputies, was charged with overseeing Colony’s disastrous merger with the NorthStar companies. Its shares have fallen 58 percent since Trump’s January 2017 inauguration as it became apparent that Colony had overvalued NorthStar’s assets. Colony’s board reached an agreement with Saltzman that resulted in his resignation, according to Wednesday’s statement.
“I completely respect and embrace Tom’s interest in returning to the CEO role as the founder and driving force behind the company for decades,” Saltzman said in the statement. “I remain a substantial shareholder, and he has my full support.”
Colony Capital had a net loss attributable to common stockholders of $70 million, or 15 cents a share, in the third quarter, the company said in a separate statement Wednesday. Adjusted funds from operations, a measure of cash flow used by real estate investors, totaled $102.2 million, or 20 cents a share, compared with an 18-cent average estimate from two analysts in a Bloomberg survey.
The company’s shares, which are down 49 percent this year, rose as much as 2.6 percent Wednesday morning following the Barrack announcement.
To contact Bloomberg News staff for this story: Shahien Nasiripour in New York at email@example.com
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