CLNY - Earnings call transcript Q4 2019 | DigitalBridge Group, Inc.

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Operator

Greetings, and welcome to Colony Capital’s Fourth Quarter Full Year 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference call is being recorded.

It is now my pleasure to turn the conference over to your host, Lasse Glassen, with ADDO Investor Relations. you. Thank

begin. may You

Lasse Glassen

and year Colony XXXX everyone, quarter Inc.’s and full earnings welcome morning, Capital, to fourth Good conference call.

call CEO; CEO CFO. the Barrack, and Mark Digital on today COO Company LLC; the Speaking and Colony’s is Bridge Chairman Holdings and current Marc and incoming Hedstrom, Ganzi, CEO of from Tom

will session remarks. question-and-answer our A prepared follow

expectations time-to-time, forward-looking on that not annual Form Before the XX, XXXX XX-Q differ statements are the and forward-looking earlier risks on call, certain well the this Company’s I quarter that note on XX-K to based risks, Form to and the hand on subject the results these including and Form June filed described but are presented the current ended are reports Company’s call business statements. quarterly SEC contains in periodic uncertainties please December report management’s limited for Potential to today. report ended X-K the statements over financial from filed as to and for current could year to with management, on assumptions. Company’s These XX, the exhibits as report from information materially and XXXX, the cause uncertainties

as All and Capital circumstances. XX, does future information undertakes update of not no call discussed on XXXX, this or is events intend February today, and Colony duty to

as to to both the GAAP and information is website, financial and consolidated was the Company financial the reconciliations financial this on such and this which call reported why in explanation are earnings measure non-GAAP morning the of available measures presented believes certain addition, In appropriate useful Company’s an basis. the issued The investors. release, presents to non-GAAP measures, on segmented Company’s represents

on the has Company available by GAAP measure reconciliation Company’s to segment, appropriate addition, reconciles website. In measures is prepared and a also this the non-GAAP reportable that financial certain table the

of and Colony would Capital. Tom over like Barrack, turn Tom? CEO call to to With that, the now I Chairman

Tom Barrack

Good you, Lasse. thank morning, and

friction primary constituencies. responsibility a to order consistent, the extraordinary is produce that returns fast-moving all must hypercompetitive adapting vision over define in this all that communicate order we accelerating reality. things define embraced seek quickly disruption, the its and long-term our don’t, change, executed relevance When members, others CEO’s by and persistently world environment. to becomes and with and a to team efficiently A and vision In in that vision to ever-changing the in

the global insatiable A caused markets yield. for flood thirst in of liquidity an has

amazingly when and pricing today physically, result, estate. financially a real most and many food oftentimes a line return between at estate in capital surgical on return are in of As quickly assets time word the has four-letter is obsolescent. competitive real the becoming is opaque. become CapEx groups And and functionally

that highways healthcare, to and are warp through new, upon journey our Things, advancements to for assets. and that in which we media speed destination entertainment mortar e-commerce manufacturing, of prolific new networks, at travel. bricks tear the data, increasing logistics, demand. and necessary the and new hospitality, biotech, we require and last-mile of transformation and anticipate information, great infrastructure to The and different Technological across big in communication Internet instantaneous valuable globe the the needs Consequently, own users of the and is

one, Consequently, the invest converting fortify and in edge. and ecosystem availing secondly, where monetization have defined in balance legacy prices that we’re at assets and ourselves competitive our of digital sheet; many historic we our number to

and as change, of and Marc that Digital rotation, must alongside from we increasingly designation the beginning just my We’ve we of is of acquisition with expand of our the As top. Ganzi ahead this digital already Bridge, also change program, accomplished successor. the

fortifying this themes. reallocation change continue a initiative, teams Rotation traditional the manage and of execute realignment to strengths business. sets and investment brand management same and necessitates and time and talent will properly global of Colony’s the resources of with while We at

to technology world. a and vision solutions a gain. the see. we just companies and as digital significant Many to become of very long-term telephonic around Our digital largest vision both pain the This provider you vision is most achievable, is well can times, the of infrastructure short-term the and the and redefinition are best for underway, across is ecosystem adaptation the

to are provide However, on we enterprise an as we we are return gain from extraordinary sheet, assets. and legacy our from long assets total our focused and meaningful stewards balance of dividends digital the continue

the and you We’re results moving I’ll of planned, down have year. we share past now field the with the as

simplification. What to starts delivering IRR net that our leverage was platform sale a Company’s modest gain net utilizing shareholders, cash light fees the share. and for million in cash industrial our proceeds XXXX, of resulted accomplished billion, incentive of the XX% and while for a with in billion approximately approximately Industrial: completed $X.XX We $XXX $X.X of

our XXXX monetization the $XXX $XXX of million monetizations with OED than exceeded of of since asset We monetization OED debt: achieved OED XXXX. in of XXXX. We billion million and equity total in target other beginning more Next, $X.X

XX% NRE: contract. inception for generating since XX% the in Colony the proceeds and to of We share sale gross completed of its $XXX to management Capital NRE, IRR delivering a million shareholders

fifth $XXX we transaction contract CLNC. of closed held of strategic Next, is And at $X commitments closing real billion total credit an credit: million. We ongoing the process. Evaluating the regarding fund capital global with our the estate management CRE CLNC CLO

in we of achieved $XX a announced rate XXXX to on to G&A continue million reduction: previously over to expected well million basis. as our And continue away. we’ll We $XX run cost click savings the exceed target

loan $X.X us That our near-term maturities GAHR including Healthcare: $X.XXX material a debt, billion aggregate in and refinanced addressed of refinancing. good and very puts of shape. all billion in a We

$XX sold we addition, million proceeds. of In three hospitals, generating equity

totaling four that Hospitality: terms seven out on maturities billion $X.X debt of years. three We portfolios, refinanced extend to accretive

estate realized gains owned management $XXX for just We million. million, in non-wholly our company and approximately sale the platform, Realty, real RXR: investment completed RXR of in pre-tax $XXX ownership a the of XX.X% resulting

fanatic dollars estate real than Next, pivot. manage we more AUM an years from digital only of Today, two real digital dramatic growth AUM, the estate in $XX billion ago, just a extraordinary increase story: zero

Let me results. the some of you review with

Digital commitments Colony for a real estate the first-time history far $X.X Partners, our with $X digital largest of DCP in to Colony fund the invested target surpassing committed Digital closed or invested. be and XX% Partners, for billion of fund historic billion size, already

manager unified DCP, with we Digital world-class Bridge Colony. and X digital companies, professionals the Holdings, portfolio Secondly, investment of of its team investment acquired added

of Additionally, we’ve number outstanding additions made the a team. Digital Colony to

sophisticated which billion investors. transaction equity raised with capital, major the States committed the from Next, anticipated March transaction close million of institutional we DCP additional $XXX $X.X capital co-investment United for Zayo: billion world’s an of an and A of Xth. in $XX.X some most of

Next, redemption all stock which for outstanding January $XXX in liability of settled preferred annualized of million, B management: completed the Series X.XX% and eliminating the perpetual of redeemable $XX X.XX% was Series dividends. million XXXX, cumulative We E preferred

XXXX a paid XXXX. committed in and are $X.XX XXXX, dividend we We to dividend a $X.XX dividend: $X.XX XXXX. pay And in

Over the and billion past repurchases. $X.X shareholders three dividends, years, preferred we’ve returned through and to over redemptions common

balance in DataBank, $XXX estate. inaugural investment data owner centers for XX.X% at DataBank: We and million, interest the approximately acquired in digital direct manager in U.S., real sheet edge a private the of leading representing controlling Company’s

facilities. our including Liquidity: million $XXX $X.X availability hand As February revolving we through credit our of XXth, significant and cash under of had liquidity billion, on of

as designated Marc Colony CEO me. succession: next CEO We Capital’s succeed Ganzi to

Company’s governance a and the Company Board independent in in Board on focus the committee, appropriate a to evolution. and for assist XX its on firm digital governance an composition, We’ve including three to Board execute to executive added refreshment additions: directors. We’ve nominating Board the ongoing search new corporate the to matters, as independent evaluate directors of join the and Board, XXXX total candidates potential digital Company’s engaged continues director process identifying to experience with with now

mission? estate solutions Bridging Simple, limited is to advantage provider compelling in become connectivity, the which logos. have of estate our mobile divide: technology possess leading to the which What communications have leading invest the characteristics. digital and will capital assets which durable we control, real partners, asset focus and real digital we occupancy, world’s growth with competitive we in in in we a Together our

permanent Colony motivation digital of to our best-in-class our partners. our operating in to shareholders’ What’s alignment digital and and thoughtfully reach, experience our tenant benefit; and access our well-regarded and relationships, partners utilize differentiated our culture, strategy? limited To global capital, on continue brand, employees focus to

Our features businesses. for balance define of sheet: curate Efficiently interest the shareholders manage as and and maximizing call, we steward legacy legacy stakeholders best businesses, in value, these other and opportunistically our

real commitment best-in-class to and the digital at nominations governance background hand, of of capabilities CEO. Board extraordinary a best of with refresh we’re process Our and members the to With a Board consistent independent tasks emphasis infrastructure, identify and of new and to with and including economy, full to committee, our on sectors our tech-driven commencing the the support digital characteristics our suite efforts governance: estate

The severe, that clear and businesses impact with income it the has been markets of commerce the we’re volatility the currently undergoing will and and pandemic the and to volatility globally the equity and set bottom. fixed to relates as to in continue on be of no guardrails

times the of at highlight moment. been infrastructure significance more has digital it is why operators of Marc in digital mission-critical infrastructure to the turn over volatility, of than durability and Marc? it I’ll to never the

Marc Ganzi

Tom. you, Thank

Digital strong is investors Colony’s to [ph] this digital believe to We long the digital has in volatility. be cycle infrastructure downside times protection. in believe upside estate been safe and for global allows more no will rotation plan. exposed than ever, seminal different. participate of haven and defensible and in to being to investment We invested this investors thematic, digital great long-term infrastructure a real

contracts and operate to in The duration exposure and years XX built-in globally to own with businesses counterparties. annual we from varying escalators, XX long-term X investment-grade have high digital

with enterprises world’s customers global Zoom, do are to conferencing the keep customers key the digital commerce. video enable deals on like uncertainty, enable examples Telecommuting helping economy applications as and economy Teams, Cisco the move Slack world continues business and to continue As our via Microsoft leading our conduct and moving. of the to

enable nodes Our servers lines feed the fiber and these towers and that signals.

continues density ensure services ecosystem the high-power goods consumers digital before to run centers been data infrastructure mission has enterprises than is Our durable and to and it Never deliver today. critical to alike. more applications

looking and and REIT, exposed and our and platform as to and various be enabling and without ahead the equal. global the our engaging customers and the map of build to sector continue in deploy investors Colony customers I’m opportunity our offers globally. to ecosystem diversified a forward XXXX journey we digital unique converged our to As parts convergence and the divide with investors a and amongst highly in thematic networks

Tom Barrack

Mark. Thanks,

demands thank directors, who’s of valued his who turn most business. amazing of the has I Mark I for resigned over our Hedstrom, Justin it great done wanted Before Metz, us, own to to due been an one recently who’s to job

We in are will our unbelievably Colony Justin have respectful, family. and always grateful,

I’ll over that, With it turn Hedstrom. to Mark

Mark Hedstrom

Thank and good everyone. morning, you, Tom,

filed reminder, Shareholders a of in quarter website. within we and this addition report As the fourth financial release to a supplemental overview corporate morning, our Public which the our is available of section earnings,

quarter will fourth results, other On and XXXX segment our a the financial and details. of call today full key year provide and I review performance, financial operational business

charge quarter net A of per loss per ongoing attributable financial infrastructure. platform the million to and significant to to $X.XX Turning to for results. components tied long-term record in was to related management anticipated carrying a business to share. $X.XX and net transformation XXXX year share, on value other investment the transition digital loss legacy led or $X.XX strategic This goodwill and contributor a real intangibles $XX was the the and plan of or to XXXX stockholders loss our leading non-cash Colony’s of of was estate common focus fourth GAAP impairment certain to the our Company full and in and $XXX create GAAP million quarter billion fourth the reduce and

million or for quarter, $XXX for $X.XX or fourth $X.XX the $XX share full million was the share per per FFO year. Core and

million fourth core of per losses equity net or quarter FFO share. was and $XX million, $XX primarily Excluding debt segment, $X.XX other in the

was FFO of year $X.XX full losses investment per annual core dividend $XX the per excluding $X.XX For million, our of share, or $XXX share. which exceeded net XXXX, million,

further Colony to to optimizing to advance XXXX on digital liquidity real of strategic the capital in In estate our priorities, of a which structure significant stated order executed and strategy. included a the business, transition number our generation initiatives streamlining

both ahead plan position. Company core basis, year-end its ended well target, of the with FFO asset year exceeding a on The strong while XXXX to a monetization contributing liquidity

XXXX. to Turning

year well that including XXXX share, to share covered expectation or the part the of generated dividend full by anticipated year in the February $X.XX of RXR Colony’s maintain and expect FFO, per cash XXXX, sale the $X.XX per interest a Company’s outlook We regular the million in $X.XX significant transitional not a year already early full gains, common underpinned Company. per FFO is for for The for core $X.XX share to addition $XXX to of gain, net was through Realty. core

Colony’s I a down AUM X% in billion, results investment our light our quarter. $XX.X in the and management Trust. ended industrial lesser to quarter compared of a FEEUM the fee-earning breakdown interest with and AUM operating XX% to primarily provide billion, Now, attributable equity the and sale quarter, last by down of will Starting December $XX.X of The third-party platform extent, to were last much decrease the business. of segment. sale to Hamburg third-party fourth under We with management compared of

to and decrease in this month as in billion XX% contrast, additional digital assets, RXR committed. the including interest approximately AUM XX% In of in the and in Realty. we OED and in previously our fourth which Digital AUM Colony reached non-digital closed fourth now quarter, mentioned committed investments quarter, X the to legacy expect XXXX We and the of dispose sale new far Company’s so AUM. continue to investments represents earlier $XX.X it’s X other Partners XXXX, FEEUM fund Colony’s entire legacy The

approximately direct edge million. the acquisition the leading manager investment in of through real in a for $XXX in The made U.S., owner estate interest DataBank, XX% the first controlling Company in private sheet centers balance fourth a of its and data also digital quarter

to our successful liquidity digital well digital credit by expanding real our focus expect estate management investment on digital as digital equity continuing platform strategy, We grow as to into strategies. and

With the expectation of vehicles. co-investment substantial associated

currently a billion at even FEEUM digital more $X.X grow XX% faster of expect and rate XXXX. to in in than We XXXX

restructuring million of during the Since on and the will XXXX. expected $XX corporate fourth existing of plan including quarter at $XX the workforce cost initiation XXX% more announced initiatives, same-store million time the Next, run XX% provide the of Company’s achieved was almost I the various plan, the an to savings, update of reorganization restructuring than announced. basis Company’s through a reduction of rate the on the of

to additional sold XXXX. in during annual to an businesses year, addition savings million be from to In to partially and platform’s real digital related savings additional be legacy growth. rate million expected by the corporate reduction run of into support businesses investment to the The the operations $XX very Colony we targeted offset $XX anticipate will the in G&A estate profitable G&A team

recovery healthcare fees, the onetime The included rent segment. estate same-store termination the Moving to in real fourth from quarter NOI quarter. increase resulted third and a XX% portfolio which receivables of an

a loan rate. We the year extended to a assets these compared substantially front. XXXX. of new NOI housing flat. million £XXX reduced NOI UK were fully items, Excluding There £XXX healthcare financing at was XXXX senior significant Same-store with same-store five-year portfolio on full also loan flat transactions on onetime refinanced a two million the was portfolio interest

nursing to address transactions interest put with lengthening extended a loan maturity refinancings a which similar These was key $XX all real XXXX fully XXXX maturities, at we estate skilled the place in a on loan along million a date XXXX facility, near-term completed objective. previously in refinancing Additionally, healthcare rate.

pressure the to Turning generated incremental wage under fourth to XXXX, room FF&E fourth due hotels higher Reserve, XXXX renovation primarily estate real Compared year, room quarter portfolio in continued the XXXX. quarter same-store the decreased hospitality fourth revenue XX%, same events of period from in displacement to the NOI, and and onetime before segment. from last demand, quarter

X% year Reserve NOI year. XXXX same Same-store quarter XXXX. compared the decreased before Reserve before fourth to to period the X% compared full and NOI XXXX events onetime portfolio Excluding FF&E decreased last renovation FF&E displacement,

to quarter, refinanced we significantly hospitality outside the aggregate lower million During two XXXX $XXX secured fourth total also date on at rates extending interest of of average. slightly portfolios, on debt maturity

a will legacy reported portfolio. versus Further, CLNC proceeds plan will quarter. per earnings earnings Last release. information quarter CLNC’s core strategic core can in grow reinvested CLNC with quarter, which CLNC or core results assets bifurcate core monetized the into More and or per found be the its in million of portfolio, announced fourth earnings which core to a definition its $XX a of amended into share nonstrategic be portfolio. the portfolio, $X.XX Yesterday, prior million, share reflect $XX of $X.XX only its the to

our is an value has OED. Strategic segment. Next Other portfolio, we equity A strategic and million and OED carrying separated equity carrying earned capital $XXX of Equity Debt alongside OED or investment into non-strategic $X.X and third-party our where billion management investments OED economics. includes value

an liquidating managing which and nonstrategic million $XXX has not current investments, carrying intended not the legacy the equity actively also business are and includes core long-term. investment of on which to to for OED, and are We’re be value management

returning quarter, the planned and the proceeds XXXX, we net asset with During $XXX returned million monetizations. equity fourth for asset the million equity of $XX completed monetizations, we full from proceeds of net OED year segment;

monetization Company XXXX the portfolio. million goal to target OED Looking has ahead, with asset $XXX the million of the a ultimately entire legacy monetize to $XXX

in capital to annual This equity preferred fourth $XX of the improve and also and for I acquisition, billion sale platform and investment deployed to billion, Company light accelerate and IRR million will million Those corporate or our times high net transition high proceeds exceptionally Company’s approximately the on while generated which quarter ongoing incentive now net a resulted utilizing Company’s preferred industrial estate, of digital and $X.X $XXX approximately real dividends. only the sale capital being completed of cash $XXX gain touch the cash a part share. In the aggregate related proceeds a into including our December, an fees platform eliminate of Company’s executed for modest equity X.X and $X.XX industrial leveraged to teens cost in and DataBank structure, leverage. its redeem sale multiple on are allocation. million to the

finally, a high about and balance associated operations in recently times word sheet volatility. And the of light and turbulent Company and these its

we mentioned believe investment business no there as is First, extremely of be the model down digital estate infrastructure. in operation slow earlier, and real digital to that resilient, that will

create the these secured in our ongoing, risk near-term all is current the allowing assessment of while legacy additional to operate on time environment still businesses Second, of we addressed have and us value maturities, our debt assets. impact

Third, we this lower interest floating levels the environment anticipated, in offset legacy may debt. rate in decline act have $X.X interest beyond to of already classes. billion secure if rates And capped the operating savings asset expectations

lastly, million we $XXX And today an are undrawn addition $X.X with at levels well-positioned cash of in stand line significant which on of hand including billion, credit. liquidity, to revolving

the pleased are reflect fortifying business progress to strong our a to XXXX. with digital sheet, our experience while our start realigning made balance us We in we to allowing transformation have

call the turn will over I to begin operator the Q&A. that, With Operator? to

Operator

Thank Jade your question you. first KBW. from Rahmani Please comes [Operator question. Instructions] Our with with proceed

Jade Rahmani

Thank ask reasonable it’s be do frame you Starting do what time to very outcome anticipate think the expect wanted to resolution? you to with you over what and I likely much. CLNC, a

Tom Barrack

Jade, good It’s morning. Tom.

expect continue and curating And CLNC better. valuable, ultimately external week, except with Hope be time business in of the very the shift, third the out sheet the from start of for in strategy XX% a as get agreement credit to the of external options. we for will what climb, then for value businesses which a accepting stock a what next other and and own along is X,XXX-point stock of robust addition interest and the series CLNC the the We we week and strategic those the best the management accretive board to within proposals Remember, share platform and and to is. anticipate manager. strategies positive we’ll of balance decline internalization for review this rates market figure

in So, next are week, on will strategic the quarter. the we’re bullish next options culminate looking in what at which really sometime our starting

Jade Rahmani

Okay.

take the you to be those proceeds proceeds, will from considered core itself to as par CLNY and CLNC stock though to that sale at could Because block company a that portfolios, or those manager have value, use the can terms company, tender a at what having is XX%-XX% back one buy CLNC’s bulk external the In shares. prospect long haircut owns will of -- think might and even of something that of to it I book that for consider that you overhang you of as would so CLNC Is until likely you announce eventually remain stock. that XX% value, consider too? of you happens assets

Tom Barrack

Yes.

is over right. really to So, you’re question, exactly of itself it’s always our question. ownership great is of The XX% that value contract easy pretty came because management a

below We’re way trading NAV. book and value

a at we’re share our course, track sale the today. go. a back distributed of and of we that is values are we parallel we in that to not getting race executing XX% So, and at perception interested the how want But, ultimately with what is in where price

So, we’ve looked at the historic value.

value So really to legacy than yes, we’re is, It’s down rapid exactly and all we’re on to value pace, where value components, we’re liquidating written it assets options, of the share that thought. road doing it’s great at we and talking, more actually the assets, in our method and looking those you’re a what the those entity’s mostly right? to we’re which those as all job relates marketable is at getting ultimate what’s

that what’s is a you over back managed third go trading as like we core And part, core know or having in helped the we think close a is the believable CLO that stabilized. other left lot. premium course, to do portfolio And other is how REITs, unbelievable. we’re you pretty at a start to The portfolio deficit book. that book, although to And trading mortgage of to time, externally can we’re

want being of and conclusion. good legacy up we’ll moment, business suggested, to the ones we out going right to can including do at understanding with both figure us So, doing anybody going to anything we’re value. the what think do we shareholder we’ll who’s with And a or core want and are an to we’re them, us bottom of to is evaluate execution It’s good share liquidity on and options the solid the XX%. some come direction assets towards the all those agreement portfolio brought with you what what right is, that

Jade Rahmani

language CLNY provide as of the past, could dividend. what Okay. if CLNC meant holders they decide with And to insight you the them, shares some the can that. dividending did out as what gain, gains special some included perhaps that you to Would In has you special such special to some the and industrials do I dividending, gain? to what to? meet your And or you does wanted by and refer term find the consider RXR

Tom Barrack

looked at of myriad we and We’ve What everything. of a is try all that. did blend

this historic depending on distributions, CLNC So, the that and that think always thought The place end flow our we be is and set where used our we’ve you cash XXX businesses. decided depending there, as for and that’s would that we can live fully special lot book we from dividend, things. -- on bank There is just with special up dividend of a idea value gains used advice it establish a or in dividend, in and analysis dividend we value on between where legacy right? that always XXXX could year for our from are covered. And some value can on be could you XXX

way. are legacy a we they’re businesses in stabilized, better doing The actually different than anticipated

either as cash into of always to keeping back we’ll greater about stream, always we’ve last market stabilize depending and We’ve debt with the transition. income we’ve hospitality volatility balance to talk that liquidity. to coronavirus trimmed special we’re And that by healthcare, on other we than said we when the things the and cash time the convert week, to we stock, plenty dividend and comfortable utilize going trim added are, got this have acquisitions. analyze, down in of the we that flow digital out as do other dividend, got happens for with one So, sheet, ramifications CLNC, an what liquidity special buying that

$X.X We’re and for including the strategy. what our at about anticipation billion liquidity, of utilization machine is digital of market

special XX% the distribution. that we in could in yes, point at use share focus the So, dividend as understanding started at stabilization time a is tool we

Jade Rahmani

Okay. thinking do of that I wanted additional you to about also, next And the also convert redemptions is your what matures year? plan preferred? ask,

Tom Barrack

Yes. redemption buyback our at always the even like -- preferred, Good looking of question. today, we’re stock. not And we’re we’re only analyzing the

promises. think a I every stock looking one back to look at I the our don’t day hate is common. price it things at we’re the from of I keep as -- business. at buying because detracts group own But looking running

cash is tempted So, back race in a do common, Today, volatile paying that utilization race to NAV best buybacks day, buy for debt, we have solution. right special it’s between very be our we committees, whatever of kind long-term, buybacks stock. common -- and investment of of a every products, our the moment a dividends, what preferred, and down products, you our think might balancing and say is, GP you digital of

those to So, on try we make we’re In evaluating daily markets, decisions not honestly. just volatile basis. quite

Jade Rahmani

Okay.

the fee and currently, been And are there’s about management amount kinds how ask competition there. if -- digital Not sure steep seeing the opportunities interesting? what quantify also, most funds some of competitive of large address very you you to digital raised. wanted landscape, what how is equity that’s seeing could Can infrastructure just you’re I you investment earnings, are under Lastly, landscape. the

Tom Barrack

let our to me that, turn over digital tower, it Marc. On

Marc Ganzi

How Good you doing? morning, Jade. are

Jade Rahmani

Thanks. Great.

Marc Ganzi

good. questions Jade So, Three there. --

digital around today over we that m anticipate answer sequence. your try this question generating the in I’ll to me we’re the generating first, year. take last and what Let FEEUM them course of

I not auctions. just find face you been value competition a What of we right. We out as you’re competitive deals. as say in competitive tell would do place environment a it’s I been. today. foremost, where would we is, it’s don’t It’s lot and play in And First on of ever options. a lot there

and competitive you If or investments X in auction, but a not XX investments team, we proprietary, the the rather where place. opportunity we XX at made get we’ve One, the convince and was look allow were the Digital to us process, we ultimately curated them partner right them, Colony there an of with were to those to able out spent with management to time

calling that And has us value shareholders. think what you always that’s LPs so, great that create we how for and your having card. is our for with endure It’s management and for we’ll been your that teams. relationships And

relates we couple generate believe guide as One through the $XX of total that by about opportunities at generate ways amount digital you, Unpacking think is it in we the we second to. of reoccurring We Jade, we guide fund for I a is areas new ideas products. you will proprietary investors, that What and that we generate a And to that that two As the would look fees. million business. second XX%. fees. little tell our roughly revenues XXXX, over is towards we coinvestment One least and grow there’s is for Jade, conservative. from that

call more But, Mark we As The are apparent already become in products. in new said QX. the around of those Hedstrom in today, process details flight some IM earlier fund raising in the we’re new products. launching and will

think is about second The swim lane coinvestment. you should

coinvestment. loan, Zayo examples, billion we of raised for just So, $X.X

in projects other four today. the have coinvestment We category

those projects Project One was of FX.

Vantage. into an Vantage Europe, $XXX expanded One. raised conduct million saw strategic Digital in was $XXX from you and that we think was million I support to $XXX of Partners announcement equity and Colony then million we a

-- then those you Jade, that details projects we coinvestors I for coinvestment had million. that great the project would we’ve three you besides got find And care. outsized got more out three to $XXX they’re will we’ve a million projects is generates going you’re to are in use FEEUM But, today, Colony the We we that of see $XXX tell significant FX, example there’s of that where XXXX. So, generate what in flight on now strategic. other right give opportunities fund, can’t

well for we we’ll XX% And So, for my of That’s ways XXXX crushing to. FEEUM. in the new format. setup of auction where that don’t. We’ve others XX-year to absolutely fantastic. don’t particularly been generate record that bunch to continue got deals sort metric is doing typically in a you these look guided is track deals we’ve anticipate play I

Operator

question Our from Randy next Riley. comes with Binner B.

Randy Binner

to want now And for -- by the right think just we last you by a high-XXs. I parsing or of laid talk and about on ‘XX. I can consolidated in guide define the further pro forma however Zayo is fee be to it -- that fall of and entity the Zayo. up expected is think, go the year-end pro I’ll number at something out out And XX% the forma share out digital. been that’s ‘XX AUM, AUM earning step then that XX% business just you pick there Is

is digital ‘XX that to and then, of then ‘XX, right And is XX% to in is the Zayo this asset pro number So, in forma it going base be XX% that that high-XXs? respectively? is say still realistic and

Marc Ganzi

good a question. It’s

we are just about So, as on where today closes you exactly talk before told let’s Zayo Tom Barrack earlier. March Xth,

under assets And to of AUM. AUM of about to assets We’re takes our across today. zip very under billion excited date in management. with to partnership assets us $X the billion billion Zayo our of of another the than total digital obviously, pro and EQT. closes, close management somewhere little a close. takes that’s of the about the we $XX it digital $XX-billion-plus Zayo of more just $XX That firm closing announce Today, of for forma Zayo have about bit Once $XX.X formally up code billion

where think XX% end about Mark digital Hedstrom we management. a north XX% the of very figure we think management that folks at AUM digital where I Zayo we that -- are of of of year by of the this the with I and that in to told investments of our end that we platform, well Tom Once XX% team are under be close will feel rest our to digital the feel somewhere XXXX. the couple of as investment management as between very capable safe about I and you good going say assets of And closes in XX% XXXX. other this we told still year.

there and have our ideas. balance how our us is get that capital, LP some the we wisely, side-by-side best roadmap We proprietary get we with to very invest capital way able our to weponize of bring clear by continuing there. a sheet where on [ph] And we’re

so AUM history equity And earlier, of and IM We’ve co-investment our further side launch I we Digital rich had products, we this business. is the a IM mentioned us. then credit Randy, Colony liquid digital REIT, now our as total private Colony Secondarily, as path a in to specifically notion important at digital consolidated. and products, in our on and new see in increasing to

was capital opportunity else as Digital seeing to are to that. a of mentioned create them bring investors, it One. that was not world. able and opportunities Vantage Colony with side-by-side example candidly ideas proprietary to our and the our our in our LPs unique Europe afforded afforded LPs put That’s an being anywhere I that So,

the unique best and in that team at what that today. is in have ecosystem planet, possible management would of the we backing companies opportunity we not Capital CEOs hyperscale Colony centers. be the data here having And We’re believe without

more gives XXXX I you and but good to our about to for ability numbers outperform the So, FEEUM Street XXXX. and our feel clarity very very I a that don’t little know if generate our I good promise feel about

Tom Barrack

It’s Randy. Hey, Thomas.

add at Bridge, me addition you in public to also assets having rolling silos -- moving forward, private bought format, thing, fit understanding stabilization is into point life remember, time When I Digital in in a which we’re of in Let where as we distinct partnership a to IM think pivotal in And Digital really six general silos. Bridge, format. to one the interest up side those managed and management, those other under equity going. some

logistics. silos the of farming opportunities, those edge from so seeing of are doing. part marketplace of cell things sheet the which we those data in much coming is the doing math themselves. at IM, don’t opportunities marry the not computing, are we’re radio the balance are and micro forefront auctions, that And silos, in said what we’re Marc smart centers, when those had market towers, And is is compete fiber, not towers, what You we to as

issue. reason fast, the transactions, of furious. be was the So, Actually, silos the they’re opportunity team, related the talent all tell expand acquisitions very Marc asset of right confusing and marketplace the that on Digital of And And acquired you, and talk. will harvest we that to going base these the and part food groups we it’s to most those as will Marc as besides in defensive party Marc’s now.

Randy Binner

is helpful. very That

in for goal So, your of much a And, think In is from lot rapid I is better this overlap the there related should and friction, way workforce? transition. -- I a there is can core in you I professional thinking your of you -- is a FFO How digital lack term. guess lot but for about and switch there that pretty then the -- guide. But, professionals, a next headcount? of it? I’m think legacy context it’s question step of of it’s prior your we of how putting expense that? understand it to hit Is to use

types? these FFO all there, asset And much ultimately investing in just I fit how much existing your pivot diligence guidance? curious is and so, I’m to, the And does workforce overlap core new sourcing, there how to is that ability into how guess

Tom Barrack

great a It’s question. Yes.

side constituencies, at business, exactly both the but have same -- the investors. partners, So, the And you number and right, constituencies them you, with our our institutional our base a right have of that, by shareholders one, biggest look of we side if limited requests.

saying give distributable economics basis. the on looking see balance On when on the and Use carrying your come term, us then you the syndicate. and over for more need the recurring value originate fees to, on and a sheet [ph] best partner side, you recur shareholders maximize seen, side, it

is and that’s business that So, that and years old base solid stays. XX

the digital, whether credit, through machine basis goes hospitality, and more to it’s it animal it’s of that industrial, the better it that that that digest get changes. out whether it’s whether it’s whatever better should and whatever the efficient So, there efficient. underline top whether is is, of is more and same, digestion chain On

for So doing management takes warriors those process precedence which of at Marc’s have on the a acquisition, team, senior silos time is underneath. origination, been this home level, long a

different have you them, highway. going all the with the down So, lanes, cards six same

top, that will the at So, some of change.

level because recycled, do financial businesses, them recycled. they best And in discontinue particular of why will get that And in need class some we that. senior help we think. And we of they that another on and to to are to do should move our frontier that as decide that them people some will pursue business. the And

harder to move, marketplace, as it’s by as a of stable it’s the is learning we’re you. what’s be responsibility in financial in to of just into be yes, But, There top the problem times. digital to move will there’s process all change. think iPhone rely, that But, Yes, the not And, to thing emotionally game nature adapt, the part the happening to honestly rise front and evolution, give going digital. and now, side only at going and the I So, change. of look quite the to side. difficult the if is of you to everybody accountability it in -- as this that at harder that’s to people we teams lot and turning

is entertainment, need the kind you But, communicated, for the more information data being amount that devices. of mobile else more coronavirus and coming that’s is what’s the of instance, volatile. the So, And happening in everything of as going information, happening these kind that’s through space. is

our have of refreshed parts replanned and or big team replaced. certainly, will So

about talking doing with that me. starting down, We’re from top the

level the same we So, it thing me like been Company a best for that. aspect take one out to did is is And we dinosaur and warrior take the frontier. And have could the that the I that’s a find thing. done next of at go can Board this who business,

existing some digital point and focused most best, We of have. none telephony We a view technological us need the need background have help. do Board. of of We that

this to we balance of protect in good going And thing that and rotate through and thing. be job years, the clear. that is a that’s for is there us. not public to we’re sheet My the we’re logos. That’s the term to a telephony the diverse nature The has that large you. not of technology the payment through see animal. next So those of middle short it’s think frustrating And And ecosystem five next is roadmaps. the days. bothering we’re company change. five to We going the five But going only taking

Randy Binner

that to be the And clear, Okay. FFO in upfront guide. That change workforce within all all I is mean, cost The to -- is helpful. that’s contemplated over. just the

Tom Barrack

Yes, for Colony entire And for raise that to last fund Randy, out XXX%. billion consider, apparatus IR used $X.X the to one you we that thing went we we then, year, fund. raised example, when go

new team who’s Randy, helping leadership, deliver not Strategy. our raise it’s now, credit of and go investment under equity efforts co team but which Kevin Kevin Smithen’s so, also only are out reading out the massive. team, to products, our that Head and And new guides Capital Formation

it’s took So, that’s a teams great digital of speak. existing example of where in the effective world “did we the We infrastructure. to And infrastructure. one it”, most fundraising the so digitize

we’re IR, together. they’ve And examples worked in playbook putting that of we credit, that they’ve see there’s for where in example work worked other worked in -- Colony that folks have at or HR

logically, it companies. by We’re assets, We you having we how that certain that a guidance we XX%. goal, a on what to given of up reduce cuts. $XX told we’ve to million may incremental those certain another What XXXX you told delivered year that we G&A bit of $XX beat for integrating $XX you. for we’ll million we find assets. little do accelerated as home What Tom by million. with And to said, G&A is that We significant the on end bit may make would of as depending go a the $XX G&A we would is million we last right beat G&A

Operator

Fritzsche from comes with Jennifer question next Fargo. Wells Our

Jennifer Fritzsche

look out wireless in? certainly and area infrastructure Marc, broadband centers, if environment. they’re the you clearly, it the data you of situation. were current as that, are we’re silos is in. But, clearly critical different I look guess, more which if to look fluid be at the at I like about? you a of infrastructure, you at most build any fiber, what your addressing to beginning excited But, It in call environment Because, would appreciate of

Marc Ganzi

And you. for thank participating. first thank Jennifer, you of all,

they And rank right children things of lot a I about try excited But performing now. are and tell be better early one you do getting sometimes actually and locations. the in in unfair. is, XXXX as would to fiber, from need We’re guide But, pick will others. more from customers to which needed know we’re you, time-to-time, me, I dark prioritize the perhaps one more than they

stream the health densification that And So, that’s the higher of on fiber pretty unusual. plant, something is demand Jennifer.

going. an see is I And is that where for demand insatiable amount what’s fiber. is, And interesting of dark dark fiber

it’s where architecture. of next or really see as into fiber we trace on the We keep the to to really us thematic, this biggest huge. your as topology connectivity as hub, push where edge But data we XXXX, is a ends center that so, I And CRAN roots eye in [ph] the thematic, customers obviously, of our think baseband asking go, network are up you hotel. have computing being main

be places that or architecture, could hubs IoT they switch main to could dark they places. to have you’ve either have environment dual smaller could us where of are could small got accumulation hubs where converging providers, providers, an path and that have multiple centers, they ran exceeding other fiber cable you routes data that be content so, companies, is radio, facilities, open be these nodes, other sites. macro And those hubs, scale be And you CRAN more takes an in where

CRAN for computing. referred is you, refer edge massive today, a see to to really we and analyst We today surge community computing, what in which the demand

the So and define the is network me, Jennifer, edge. where customer problem. where’s a weakest, is there’s their latency asking where the constantly is us tells Well, edge edge, the the everyone define

think It’s really have edge it the Netflix; assets And we are this you that today what��s And with happening can is can have it [ph] those different to growth it’s in our happening, road a that invest. Amazon; is a for be going pay Azure; DataBank, it where it’s our at the different T-Mobile; customers characteristics. haul Colony edge for on happening can going happening And edge it defensible can it’s continue hub, for network, relationships a different center. best challenge data on be can different the for route. for what the is for to Because NVIDIA. different be massive happening to Zayo us, computing CRAN So and an be it’s long-term long customers as be for endure. about is opportunity XNet that as

So, think. excited, I’m really I

places defensible and our the hub, CRAN So, our comfort in short for the of places dark we investors find customers is safety characteristics see they’re our and going where and where but assets. to answer fiber growing

Jennifer Fritzsche

off add FCC And you’ve XXX approval, your about of one since band If pretty puts call, speak, think more I talking I two merger kind had Sprint the last developments; of into major which question C just could had that, place. you’ve freeing up we have spectrum. tailing megahertz the we as T-Mobile

I see each assume both think of you significantly is fair kind those maybe separate your to events it data kind for being but? silos, positive centers is of one,

Marc Ganzi

Sure.

take T-Mobile the Sprint me Let merger.

First of for in and supporting makes stronger very And Sprint a the we a stronger early we all, were T-Mobile better merger. consumers. for that believe outcome

customers. those very We’re both to close

massive As investment know, being program you has dominant XXXX a in and and beyond. in T-Mobile carrier for XXXX that merger a

because of ability T-Mobile And hubs, unlike us, on it macro needs it have fiber, deliver more it solution cells, to for fantastic more with more our And infrastructure them. the we lot and speak. as them for a planet. CRAN needs sites. unique any we And digital it is building a Jennifer, small needs So, other REIT needs we’re for converged that’s more a relationship logo

his Mike So, about Ray, with sit we we’re how and Neville engineering, team not talking and tower. Simpson we with when sit we in one deliver

Colony XX about market? about a entire talking deliver talking at not is, how do today how an we We’re we’re What we deliver solution for nodes.

that handle us for you. Let

we the for to the ability most have have entitle verticals have but multiple have ability We execute formation, the across we our we skills, to and execute, things, the capital necessary importantly, customers.

and T-Mobile looking going for forward multi-decade there. And is going, we incredibly deep we with bright. that think entire relationship about the had we’re them. to And with management where team organization so, is see and Neville as I’ve Braxton the future a very

and through the left assets. that you perhaps same It’s Sprint Charlie the At get the behind a huge as Cullen. opportunity assets Tom legacy look time, for and

DISH. doing what in We’re excited been DISH to We’ve and about IoT. time very provider infrastructure long XG a of is

holistic industry. of for Charlie companies guys out think building with and again, once and team to can have in something network. of and that there the some I’m provide fiber smartest us his this can’t in it’s and one really is initiatives other to of that got their right the for unique is we that environment. They’ve provide work a set with environment. a end massive them end portfolio of excited him sit converged in needs. towers our a that a gone converged the responded in XG and invitation network And REIT solution digital to for I have customer do perhaps solutions But now their to to total

is designs early what on DISH think So, that us And for is the very very, we for is very doing exciting customers. exciting.

had questions. other think your Jennifer. don’t I all if you one I answered know question, I

Jennifer Fritzsche

Just spectrum this of If the spectrum. C XXX the market. megahertz Band happens, into pushed

Marc Ganzi

CBRS. excited about Sure

we’ve doing the been with users, one been of and So, trial at that is Jennifer, been testing enterprise we’ve CBRS things doing, XNet. that we’ve

employees. in we’re ability a deploy we’ve And seen. NDAs systems And is to that area manufacturing millions that other and about spectrum so, unique And that wide unlike has savings any feet network, square the space some what’s create we thousands XG and on major bringing have of that ever cost great deploy enterprise manufacturers XNet place is, network with enterprises. to have of hundreds of of corporate

area at really can we main them host helping time for applications of for across spectrum, the We’re T-Mobile, and And Verizon, same of cost of their that their corporate user, nature for their because bring spectrum own wide infrastructure. down across the deploy and also network. that total AT&T

spectrum, And having sharing XNet that at Illinois nodes, ourselves deploy deploy real so, those it’s fiber, infrastructure, having enterprises. good game shared by someone by our company deploy spectrum that that and for changer and a then or by like portfolio

for actually now, all trials of which are going got So we’ve revenue right generating on three XNet.

this it, in other so we’re venues XG to at buildings because can and CBRS opportunity, have looking have So, I mobile months of talking a really about can networks. as tunnels new some and the many it’s And opportunity. real cost the Colony see a that us as a bring estate, going have next conferences can much amazing revenue forward we large they the CBRS really down tell. we major up for stadiums opportunity of is over to. we couple I’m we being of we so where I’m operators penetrate, that and proliferate about and places their you airports as bandwidth fired total really for

Operator

We of have At session. time, to the management like reached over comments. back turn the end this I’d the closing to for question-and-answer call

Tom Barrack

moving. the us which slow on moving. lot sometimes plain Great. it’s today is this it’s slow all of benefits think know I so of because one mind, everybody’s of midst volatility. a like And And assets, hard of everybody. for comes minds to is I in Well, what thanks, are seems things It the

we So, a become hope the that coronavirus doesn’t pandemic.

do this, silos may to look also to things. result cash may alternatives, evaluating we’re And how businesses. and Hospitality healthcare, in those we are is across as a be our core businesses reposition, how we assets and told and be of it, of those FFO you, Marc the defense We’re defensively. defensive come of options all as the superb. offensive, way, do of what moment do to we And legacy flow. lots massive by there and producing what opportunities of like might the concluding What and constantly digital evaluating as nature take opportunities to all in separate

down. at But stock, remember, of right So, looking do bottom rates conversion expectation the at looking buying decreasing we’re line. looking we’re time our we’re back preferred, we goes the as comes to when at interest

ability of most huge debt is So, huge, floating our of the asset. a rate

with there being for us. thanks So,

us. being somehow solution Let’s that Thanks a without deaths more stabilize and too with consequences. coronavirus comes these or hope that up for markets many with the

Operator

today’s concludes This conference.

disconnect may participation. we for lines thank your and You at your you this time

DigitalBridge (DBRG) 28 Feb 202019 Q4 Earnings call transcript