Tom Barrack, the real estate tycoon who helped his ally Donald Trump win the White House, has agreed to explore a reorganisation of his Colony Capital business after pressure from a little-known activist investor.
Colony, which has lost more than half of its value since a disastrous merger with rival Northstar at about the same time that Mr Trump took office in January 2017, said it had reached agreement with Blackwells Capital to appoint two new directors to its board. Both will sit on a special committee “tasked with reviewing . . . issues related to the company’s assets and business configuration”.
The announcement marks a striking victory for Blackwells in what is only its second public campaign. Founded in 2016, the fund has no outside investors and is run by Jason Aintabi, a member of a wealthy Canadian family with real estate interests throughout the world. Mr Aintabi has told colleagues he found common ground with Mr Barrack over their shared Lebanese ancestry.
Colony owns properties across the healthcare, industrial and hospitality sectors. It also manages assets held in private equity funds backed by outside investors.
Talks between the two sides began in September, people familiar with the situation said, about two months before Colony ousted chief executive Richard Saltzman. That move saw Mr Barrack return to the top job, where he began cutting 15 per cent of the company’s workforce in an effort to stem larger-than-expected losses.
Mr Barrack played a high-profile and at times controversial role in Mr Trump’s ascent to power. He attended the 2016 Republican national convention to deliver a primetime address in support of his longtime friend. Earlier he had introduced the future president to Paul Manafort, who became the Trump campaign chairman and who is now in prison awaiting sentencing on counts of fraud, obstruction and conspiracy against the US.
Mr Barrack’s firm also hired Manafort’s former deputy, Rick Gates, as a consultant after the election, but they parted ways after Mr Gates pleaded guilty to financial fraud and lying to investigators in the Mueller investigation into Russia’s interference in the 2016 election.
Mr Trump’s inaugural committee, which Mr Barrack chaired, has been subpoenaed by federal prosecutors in New York seeking information on its donors and spending.
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