(Bloomberg)—A week before he was charged with illegal lobbying for the United Arab Emirates, Tom Barrack traveled to New York for an on-camera interview in Midtown Manhattan.
Dressed casually in dark jeans and a gray, long-sleeve top by Zegna, he gave no indication that he knew federal prosecutors across the East River in Brooklyn were preparing a seven-count indictment.
The investor, 74, spoke comfortably and confidently about his relationships in the Middle East, some of which go back a half-century to when, as a young lawyer from Los Angeles, he worked in Saudi Arabia.
Barrack called Sheikh Mohammed bin Zayed, the crown prince of Abu Dhabi, “one of the best leaders anywhere in history” and said Emiratis would be among his co-investors in a venture he had just started to finance deals in the hospitality, leisure and entertainment industries.
If anything, he was relaxed and seemed relieved to have moved on from two of the most challenging episodes of his career: the presidency of Donald Trump and the turnaround of Colony Capital, the real estate investment firm he founded in 1991.
Barrack, who was one of Trump’s biggest backers on Wall Street and chaired the committee that funded his inauguration, described his detour into politics as full of “anguish” and the troubles at Colony as a “nightmare.”
The comments from his July 13 interview with Bloomberg Television have been edited and condensed.
You’re starting a new investing business at the golden age of 74. Why?
I paid the price to be able to know what doors to knock on and what doors to open, and a little more relaxed atmosphere.
You’re pretty rich. You could retire if you wanted to.
It’s taking on complicated issues and things that just keep you supple, that keep you fresh, that keep you in the game. I have friends who have retired, and as soon as you step off the gas, bad things happen.
What I’m interested in doing is just investing myself, with my family office and club investors in elephant transactions that have tremendous opportunity.
I’ve learned over time to turn right when everybody else is turning left. We’re in the midst of zero interest rates. Everybody’s yield-driven. So much liquidity, the world is in a thirst for yield. For me, it’s time to not look at yield and look at total return.
What does that look like?
The hospitality industry as it relates to wellness, as it relates to health, as it relates to the next model of what’s available, as it relates to fractional ownership of that residential brand, I think for the top brands is going to be on fire for the next 36 months.
Capital is very hesitant to run into these developments of mega resorts. It’s one area in which I look and say there’s a tremendous competitive advantage because people are going to start traveling, Covid or no Covid.
How many of these deals do you anticipate doing in a given year?
Two or three.
We’re talking about tickets of what size?
We formed a little club of the institutional investors around the world that have been with me since the beginning. Writing equity tickets of $300 million to $500 million is about where we’ll be.
You have deep and long-standing ties to the Qataris, the Emiratis. You have a history in Saudi Arabia that goes back to one of your first jobs ever in the 1970s. Are they all behind you in this effort?
Yes.
I heard that the Ambani family is also backing it. Is that true?
They are. And Mukesh Ambani is one of the smartest human beings that I’ve ever met and comes from amazingly humble origins in one of the most complicated countries and world. He’s a great friend and a valued partner.
Your pitch to your new investors is a highly personal one. I want you to summarize it. Invest with me, Tom Barrack, because?
Because I’m putting my own money in ahead of yours. I have 40 years of experience to understand where we’re going and the relationships to make it work. And I’m only interested in doing high-quality, extraordinary, rare and scarce transactions that have a gigantic total-return potential. I’m not in the asset-management business, I’m not in the other silos that they need to invest in, and I’m not giving them a pitch on a fund.
There’s no management fee?
No, because I’m not managing a fund. What I’m saying is, “I want you to come along with me because it’s scale that creates the opportunity.” I need additional capital.
We have to talk about your legacy at Colony. What was it that you misjudged?
A series of things. In 2016, I went to play with President Trump. I thought that was a great opportunity for me to pay back. He was a friend. He is a friend. It wasn’t political. I never looked at it that way.
At that time, it was merger mania, and they decided that the combination of Colony and NorthStar would take it to $140 billion of assets. And I probably had my eye off the ball because I was concentrating on, at that time, the campaign and the transition, and then the election. It was a bad deal. It was a horrible deal. In 2018, the board asked me to come back and fix the problem. And it was a nightmare. Very, very complicated.
I take responsibility for taking my eye off the ball. It’s too hard in these big companies to do all of those things well.
How do you feel about the role that you played in his political ascendancy and his presidency?
Anguish, agony. When you’re looking back at that process, it wasn’t fun, it wasn’t rewarding, it wasn’t any of those things. And I knew the game going in, I knew all those things eventually happen when you enter that political arena, especially from a business point of view.
There are very few businessmen that ever survive in the political milieu in Washington. Ever. Including Donald Trump, who I have great admiration for. I did this, honestly, at the beginning thinking that he was just renegotiating his “Apprentice” contract. At the very beginning, nobody really knew: Was he serious or not serious?
Including you.
Including me. But he was a friend and he needed some Wall Street institutional help. Steve Mnuchin and I were the only guys available.
Any regrets?
No. From my simple beginnings, to have the opportunity to be next to a president of the United States, to have the honor of running an inauguration, to be up close and personal on some issues that affect world order.
I paid a personal price for it. The adversarialness of America and squaring off on both sides is something I still don’t understand. I support the president of the United States. Joe Biden, I know he’s a super human being. Why don’t we all as Americans just say that we’re going to stand behind him and give him a chance? Something’s happening in America. The divide between the haves and the have-nots is too wide. It’s too adversarial.
How do you think history will judge the Trump presidency?
Better than it looks right now, actually. A large amount of what he did, substantively, was solid. Had he switched his attitude, become more elegant, more patient, less abusive -- why did he not do that? My humble opinion is there’s a constituency in America that didn’t want him to do that. There’s still a constituency. When you talk about people who don’t want to be vaccinated, it’s red and blue.
How does history get over the claims of a stolen election and widespread fraud? How does history get over Jan. 6?
It doesn’t.
And how does history judge the Trump presidency favorably with that as its bookend?
Because history is in segments. There’s fraud in every election. The manner in which this was approached and the drama in which he portrayed it was not elegant, whatever the reality of it was.
Some people would use considerably harsher words to describe it.
There are people that are going to continue on this conspiracy theory regardless. It’s a political issue for the Republicans to use. That’s just warfare, and I don’t think it’s worthwhile.
If he were to run in 2024, do you think he’d be running on a campaign of divisiveness or a campaign of unification?
Today it looks like it’s a campaign of divisiveness, which I’m not interested in.
© 2021 Bloomberg L.P.
