LOS ANGELES—Colony Financial Inc. and Colony Capital LLC said Thursday that they had closed on their previously announced merger, with the combined entity now going forth as Colony Capital Inc. It unites the predecessor companies' investment activity and resources under a single internally-managed structure with an UPREIT structure, and represents about $19 billion in assets under management and $13 billion of equity under management.

“This combination allows Colony Capital to expand its unique global culture and brand by utilizing its strong balance sheet to create bespoke investment products and platforms in real assets and at opportunistic points in cycles and geographies,” says executive chairman Thomas Barrack. He will lead the new company, which is trading on the New York Stock Exchange as CLNY, along with CEO Richard B. Saltzman.

Both Barrack and Saltzman have entered into five-year employment agreements with CLNY, and will continue to oversee and manage the day-to-day business operations of the group. Colony Capital's senior management team has entered into three-year agreements with CLNY.

Saltzman says the united CLNY, which has 14 offices across the globe, will continue Colony Capital LLC's role of forming the general partner or sponsor of private equity funds and other investment vehicles. The goal is to allow CLNY to capture fees and carried interest from the funds and vehicles it sponsors and manages.

Furthermore, CLNY intends to invest primarily through these sponsor positions prospectively as opposed to just directly in assets. This is expected to produce more accretive economics for CLNY's shareholders, while simultaneously providing substantially greater alignment for limited partners and other investors in those funds and vehicles.

Morgan Stanley acted as financial advisor to the special committee of CLNY's board in connection with the transaction, while Wachtell, Lipton, Rosen & Katz provided legal counsel to the special committee and Hogan Lovells acted as CLNY's legal advisor. Goldman Sachs provided financial counsel to Colony Capital LLC, while the law firm of Skadden, Arps, Slate, Meagher & Flom LLP served as its legal advisor in connection with the merger.