New recruit Chang expands Colony beyond real estate

Chang, formerly a partner with TPG Capital in Hong Kong, has held board seats at investees including Lenovo Group, Shenzhen Development Bank, Crystal Decisions and ON Semiconductor, and was chairman of the board of TPG's Singapore-based investee UTAC Holdings in 2007-09.

With Chang’s hire Colony will be expanding from historical focus on real estate. In Colony’s public statement, Thomas Barrack, Colony’s founding chairman and CEO, emphasized the new principal’s, “broad range of private equity investing experience in diverse sectors including energy, healthcare, technology and consumer products. Justin’s skill set will help us expand the Colony brand to many of these industries across the globe.”

After 15 years loyal to TPG, sources say his departure was rather unexpected, but it appears the opportunity to open a new strategy at Colony was compelling enough an opportunity. “I look forward to helping the firm broaden its range of new investment opportunities,” said Chang.

Colony itself has recently broken with tradition, delving into a particularly diverse range of investments. This included a deal with celebrity photographer Annie Leibovitz that left the firm her sole creditor and marketing partner for her library of pictures. Another was the acquisition of a $23.5 million face value loan on Michael Jackson’s Neverland ranch in May 2008, giving Colony rights to the notorious California estate.

But Colony’s moves are not so much a departure from its core strategy as they are an indication of a broader trend across the alternatives space. Sources have noted that traditional private equity and real estate investment strategies are becoming increasingly intertwined. Firms that invest in debt and into distressed assets as part of their approach are under pressure to buttress their capabilities in operational management and business improvement.

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