A spokesperson for Colony NorthStar (NYSE:CLNS) clarified statements made by president and chief executive officer Richard Saltzman on the company’s recent earnings call relating to its focus on institutional investors in 2018 rather than the traditional broker-dealer and RIA channels.
On the company’s earnings call, Saltzman noted that retail broker-dealer distribution was an area of “very disappointing results,” due to regulatory headwinds stemming from the Department of Labor’s fiduciary rule and the “change in product constructs, more conservative ‘40 Act and interval funds that operate with less leverage and offer more liquidity options.”
“Right now, our model for 2018 is pretty much 100 percent focused on institutional side. We think given what’s happened in the retail capital raising environment, that hopefully there is a strong future there,” he said.
An unnamed source close to the matter, clarified that Colony NorthStar remains committed to the retail space, via its partnership with S2K Financial Holdings LLC, but that it is also aggressively pursuing distribution of its investment products in the institutional space.
In December of 2017, Colony NorthStar announced its intention to combine its retail distribution business with S2K Financial Holdings LLC to bolster its commitment to its retail distribution platform. Subject to customary closing conditions, including completion of required regulatory filings, the proposed S2K transaction is expected to close in the second quarter of 2018.
Colony NorthStar resulted from the January 2017 merger between Colony Capital Inc., NorthStar Asset Management Group Inc. and NorthStar Realty Finance Corp. The company has property holdings in the healthcare, industrial and hospitality sectors, other equity and debt investments, and an embedded institutional and retail investment management business. As of December 31, 2017, Colony NorthStar had assets under management of $43 billion.