Colony Capital: The Mixed Investment Record of Tom Barrack
Some believe the longtime friend of Donald Trump has been a poor steward of other people’s capital
By Mark Vandevelde
As the global recession deepened in 2008, Tom Barrack was in his element. Over the course of two decades, the chief executive of Los Angeles-based Colony Capital had carved out a reputation as a real estate investor who placed winning bets when others ran scared. So, at the bidding of a longtime associate, Mr Barrack set off for Las Vegas to meet Michael Jackson.
The king of pop was in a bad place. He had defaulted on the mortgage on his Neverland ranch in California, a country-style house with its own zoo, and no bank would help. “You have my family and my life in the palm of your hand,” Jackson would tell those around him, according to his manager Tohme Tohme, who had helped Mr Barrack raise money in the Middle East, and was the man who invited him to Las Vegas. “Please don’t hurt me.”
Mr Barrack sensed an opportunity. Using some investor money, he bought the $23m Neverland loan and cancelled a plan to auction off the property. Jackson, spared from the threat of eviction, was not given a fixed deadline to pay off the debt, which passed to a Colony private equity fund backed by some of…
