Special Committee of the Board of Directors
NorthStar Asset Management Group Inc.
399 Park Avenue, 18th Floor
New York, New York 10022
MSD Partners, L.P., MSD Capital, L.P. and their respective affiliates collectively own 19,280,449 shares of the common stock of NorthStar Asset Management Group Inc. ("NSAM"), which represents approximately 10.2% of NSAM's outstanding common stock. As the largest stockholder of NSAM, we have been considering the proposed combination of NSAM, Colony Capital, Inc. ("Colony") and NorthStar Realty Finance Corp. that was announced on June 3, 2016. As you are aware, we have been a long-term investor in NSAM.
We agree that the proposed combination has the potential to create significant value though scale, cost synergies, strategic focus and enhanced valuation. The combination could be a positive transformational transaction for all three companies. However, we also believe that, as currently structured, the proposed combination does not provide sufficient value to NSAM's stockholders. In addition, the currently proposed governance structure for the combined company falls short of good governance norms in many key respects. We believe these shortcomings will hinder the interest of all three companies' stockholders in achieving the type of full valuation for the combined company that is rightfully accorded to public companies with the highest governance standards and with the best possible management alignment with shareholders.
We have communicated to both the Special Committee's advisors and the management of Colony that we do not intend to vote for the transaction as currently proposed. We are available to engage in discussions at your convenience and to consider any modifications to the transaction that may be proposed and presented to NSAM stockholders.
Notwithstanding these efforts, and particularly given that other NSAM stockholders have stated publicly that they intend to vote against the proposed transaction, it remains possible that NSAM stockholders will not approve the pending combination. We trust that you will be exercising all of your duties as directors of NSAM in good faith to ensure that NSAM is best positioned to maximize value for its stockholders in such a scenario. As the company's largest stockholder, we expect you to provide the oversight necessary to ensure that NSAM's management is focused solely on value maximization for all stockholders, and that you will not allow any conflicts of interest, especially those that might arise from the potential triggering of severance and change of control payments, to impair what is in the best interests of NSAM and all of its stockholders.
We look forward to discussing these important matters.
Very truly yours,
MSD Partners, L.P. and MSD Capital, L.P.
About MSD Capital, L.P. and MSD Partners, L.P.
MSD Capital, L.P. is the private investment firm that was established in 1998 to exclusively manage the capital of Michael Dell and his family. The firm's investment strategy is focused on maximizing long-term capital appreciation by making investments across the globe in the equities of public and private companies, credit, real estate and other asset classes and securities. In 2009, the principals of MSD Capital formed MSD Partners, L.P., an SEC-registered investment adviser, to enable a select group of investors to invest in strategies that were developed by MSD Capital. MSD Capital and MSD Partners are headquartered in New York. In total, the firms manage assets in excess of $15 billion.
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SOURCE MSD Partners, L.P. and MSD Capital, L.P.