Global investment management firm Colony Capital recently acquired Digital Bridge for $325 million, the companies announced in a release. The acquisition is part of Colony Capital’s evolution into, “a leading owner and investment manager of assets, businesses and investment management products in which the digital and real estate frontiers intersect.”
Colony Capital’s Digital Bridge acquisition comes not to long after it closed on Digital Colony Partners, a $4.05 billion fund that both companies sponsored. Digital Colony Partners will focus on global opportunities in digital infrastructure and is the largest first-time institutional fund of its kind.
With this transaction, Digital Bridge’s team of investment professionals and its management of the company’s portfolio of high-performing assets will now reside within the Colony franchise. The acquisition will continue Colony’s strategy of creating investment management platforms and add focus on assets and businesses that benefit from an increasingly digital world. These assets include communications infrastructure, quant-driven listed securities products, artificial intelligence, digital credit products, smart logistics industrial, private equity and emerging markets infrastructure and growth equity strategies.
Digital Bridge currently manages approximately $20 billion of digital infrastructure around the world directly and through Digital Colony Partners, as well as pro forma for Digital Colony Partners’ pending the Zayo Group Holdings Transaction. Its portfolio combined with Colony’s footprint will give the merged firm almost $60 billion of assets under management. The company believes its focus on digital infrastructure and digitally driven investment management businesses will generate significant and sustainable value for shareholders. It’s also of the company’s belief that its focus on digital will complement other recent initiatives in other growth areas including emerging markets, energy and listed securities.
Combining the companies will also create a clear leadership succession plan for Colony, which will be implemented during the next 18 to 24 months. Marc Ganzi, Digital Bridge founder and Chief Executive Officer, a Managing Partner and an Investment Committee Member at Digital Colony, will succeed Thomas Barrack, Jr. as CEO of Colony.
“Colony Capital was founded to pursue value-added investment opportunities in real estate and real estate operating companies and has been a pioneer across a myriad of real asset cycles, geographies, and platforms,” Barrack said. “As our experiential world gives way to a new future – a data-driven world – real estate in its current format with long-dated contractual revenue streams from traditional tenants will have to change and adapt or face substantial obsolescence. Data-driven decisions, shared space utilization, ‘everything-as-a-service,’ new communications networks, and last-mile delivery systems, are examples of new technologies, which will disintermediate everything in their paths. In fact, location, location, location is giving way to connect, connect, connect. This pivot presents a new investable frontier across the globe for those who are armed with the proper resources and experience.”
“Tom Barrack has been prescient throughout his career in recognizing transformative opportunities, and as a result, Colony has always been a market leader,” Ganzi said. “I have been working closely with Tom and many of the senior Colony executives as we raised and now invest the Digital Colony Partners fund, and I’m thrilled to combine our team with their powerful arsenal of operating and financial expertise, and the Colony balance sheet and fundraising channels, which will enable us to scale and stay ahead of trends in digital infrastructure. Our combined vision will focus on the reality that ever-larger numbers of people will use ever more devices, and the true explosion of use, driven by interconnected devices, cloud computing, mobility, big data, the internet of things, and especially the 5G roll-out, is still to come. Together as the new Colony, we are excited to bring these opportunities to investors.”
