Colony NorthStar Inc. (NYSE:CLNS), a publicly-traded equity REIT and sponsor of non-traded direct investment programs, has signed a non-binding agreement with S2K Financial Holdings LLC to merge Colony NorthStar’s broker-dealer, NorthStar Securities, with S2K to create a new broker-dealer retail distribution business named Colony S2K Holdings LLC.
The proposed transaction would include Colony NorthStar contributing NorthStar Securities in exchange for a majority ownership interest in S2K, which would be rebranded as Colony S2K Holdings LLC.
The combined brokerage platform would distribute both the current and future investment product slate of Colony NorthStar and S2K. The company plans to have offices in Denver and New York, and is expected to include significant senior leadership representation from the legacy NorthStar Securities team. The transaction is expected to close in the first quarter of 2018.
Colony S2K Holdings will be led by S2K Financial CEO Steven Kantor. Kantor has more than 30 years of investment banking and capital markets experience, including as global head of investment banking and co-founder of Cantor Commercial Real Estate at Cantor Fitzgerald, global head of securities and alternative investments at Credit Suisse, and head of the real estate investment banking and financing divisions at Donaldson Lufkin & Jenrette.
“For a variety of different reasons, the industry is going through a significant transformation and this strengthens and renews our commitment to the space in a way that maximizes our opportunity to be a ‘best-in-class’ market leader,” said Richard Saltzman, CEO and president of Colony NorthStar. “We’ve known Steve Kantor for more than 25 years and have tremendous confidence in his leadership capabilities and resourcefulness to achieve this objective.”
In other Colony NorthStar news, shareholders of NorthStar Real Estate Income Trust and NorthStar Real Estate Income II will vote next month to merge the companies with a select portfolio of Colony NorthStar assets and liabilities in an all-stock transaction to create a combined company named Colony NorthStar Credit Real Estate Inc. If approved, the resulting company will be a commercial real estate credit REIT with approximately $5.1 billion in assets and $3.4 billion in equity value.
S2K is the holding company of S2K Financial LLC, a registered broker-dealer wholesale distributor of investment vehicles and funds, and S2K Servicing LLC, a provider of administrative services to institutional investment managers.
Colony NorthStar resulted from the January 2017 merger between Colony Capital Inc., NorthStar Asset Management Group Inc., and NorthStar Realty Finance Corp. The company currently has assets under management of $57 billion and manages capital on behalf of its stockholders, as well as institutional and retail investors in private funds, non-traded and traded real estate investment trusts and registered investment companies.