Colony NorthStar raised $980 million in the first quarter of 2017, including $940 million from institutional investors, the Los Angeles-based firm said in its quarterly earnings report Wednesday.
The alternative asset manager was listed on the New York Stock Exchange as a real estate investment trust in January after the three-way merger of Colony Capital, NorthStar Asset Management and NorthStar Realty Finance was complete. The new firm had $56 billion in assets under management as of March 31, according to its earnings report.
About a third of the REIT’s capital collected during the first quarter went to the firm’s open-ended vehicle, Colony Industrial Fund. The firm picked up $355 million in commitments, taking CIF to more than $1 billion of third-party commitments, Richard Saltzman, the firm’s chief executive, said on Wednesday’s analyst call.
Retail fundraising accounted for $40 million of first-quarter capital raising. With $10.2 billion in commitments, the firm’s institutional funds comprise about 18 percent of the firm’s assets under management.
“We are witnessing strong momentum in both the institutional and retail channels,” Saltzman said. “We are targeting total fundraising of $2 billion in 2017, double our performance in 2016.”
Colony NorthStar also has $14.9 billion worth of balance sheet-funded investments in healthcare, industrial, hospitality and other equity and debt real estate.
During the quarter, the firm pared down some of its non-core real estate holdings, selling its manufacturing housing portfolio for $2 billion and 7.5 million shares – equal to half of its interest – of Colony Starwood Homes, a single-family rental-focused REIT, for an undisclosed price.
The firm is also exploring strategic alternatives for The Townsend Group, PERE previously reported. Colony NorthStar’s stake in the Cleveland, Ohio-based company is worth $14.5 billion, or about 26 percent of its total AUM. PERE understands that Colony NorthStar is exploring a potential sale because majority ownership of an asset manager does not fit with the firm’s business model as a REIT, which owns only real estate assets.
“We’ve never said Townsend is a core part of the investment management platform,” Saltzman said on the earnings call. “It’s a great business, but it’s certainly not core.”