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Colony Capital eyes group public listing

The firm’s founder, Tom Barrack, has reportedly signalled his intention to take the firm public, using its REIT debut vehicle, Colony Financial, as a stepping stone.

Tom Barrack, the founder of Los Angeles-based private equity real estate firm Colony Capital, has disclosed plans to investors to seek a public listing, according to a report by the Financial Times.

Barrack, who set up the firm in 1981, is believed to have said he plans to use Colony Financial, a REIT which was launched in July, as “a window to the public markets”.

His plan would be for Colony to manage Colony Financial initially with the vehicle investing alongside its private funds but that eventually it would list as a REIT in its own right.

The news comes a day after Colony said it would cut its fundraising target for Colony Financial to $250 million from its initial target of $500 million. Rival private equity real estate firm Apollo Global Management has also reduced the target for its debut REIT from $600 million to $200 million.

The cuts have been blamed on a general loss in value in the US REIT market, despite optimism for new vehicles deriving from the success of Starwood Capital, which raised $810 million for its first REIT, Starwood Property Trust, $300 million more than originally targeted.

Two further REITs are planned to come to the market in the next week, including Ladder Capital’s Ladder Capital Realty Finance and AllianceBernstein’s Foursquare Capital Corp.