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NorthStar Raises $112 Million in October, Announces Future Non-Traded BDC Offering

NorthStar Asset Management Group, Inc. (NYSE: NSAM) (NSAM) announced its third quarter results today. NSAM was formed via a spin-off from North Star Realty Finance (NYSE: NRF) that was completed by July of this year.

NSAM sponsors NorthStar’s non-traded investment products. NorthStar Realty Securities is its broker-dealer and capital raising arm.

During the third quarter, NorthStar Realty Securities wholesalers raised about $291 million in equity capital through a selling group of independent broker-dealers. $112 million flowed in during October. Year-to-date, the company has raised $771 million and total capital-to-date reached $2.1 billion.

Al Tylis, President of NSAM, expects to see growth in capital raising efforts through the end of the year and into next.

Mr. Tylis attributes the future growth to several factors including a couple of new offerings.

The previously announced New York tri-state area focused commercial real estate non-traded REIT co-sponsored by NSAM and RXR Realty LLC could fetch up to $2 billion in capital. NSAM expects this offering to be effective within a few weeks.

Also, just announced today, NSAM will co-sponsor a non-traded business development company (BDC) with Och-Ziff Capital Management Group, LLC. No documents have been filed as of yet regarding the BDC so little information was available.

Tylis attributes past, present, and future success to the firm’s focus on reliable and superior business practices.

“Our focus in the non-traded REIT business has always been about being the highest quality, highest integrity, institutional sponsor in the space. That’s how we built the business over the last four to five years,” commented Tylis during an earnings call.

NSAM also believes it has and will continue to capture market share from other sponsors.

“We expect them [sales], irrespective of what happens in the industry, to be significantly higher next year and that will by definition come from taking market share from weaker sponsors,” commented Tylis.

When asked by an analyst if NSAM expects to benefit from the troubles at ARCP and RCAP, Tylis answered cautiously, “To the extent there are sponsors that have issues that have had market share in the past, I could certainly see in this type of environment with increased regulation and focus that the broker-dealer community will gravitate to folks like us that are of an utmost quality and integrity and taking an institutional approach.”