G.P. Pacific Capital Teams with Colony Capital –

In an undisclosed investment, principal equity investor and merchant banking firm Pacific Capital Group this month purchased a majority stake in international investment firm Colony Capital Inc. The joint venture is expected to expand the reach of both firms, generating global deal flow in technology, media, insurance, real estate, health care and financial services.

Pacific Capital, which founded Global Crossing Ltd., the developer, owner and operator of the first global fiber optic network, will invest jointly with Colony in future private equity investments augmenting its scope in both Old and New Economy companies.

“Colony has an enviable track record, talented investment professionals, and one of the best reputations as an investment partner,” said Gary Winnick, founder, chairman and chief executive officer of Pacific Capital and founder and CEO of Global Crossing, in a statement. “Joining with Colony immediately makes us both a new leader in private equity investing, allowing us to maximize our expertise in the New Economy and invest opportunistically on a global scale in asset classes and sectors which Global Crossing is not targeting.”

Until now, Colony Capital’s expertise has mainly been investing in real estate, broadly defined. Under the direction of Thomas Barrack, Colony Capital’s chief executive and chairman, the firm has focused on operating businesses that have a large dependence on real estate, such as Punch Taverns in England, which it bought alongside Texas Pacific Group. The firm has invested over $6 billion since it was founded in 1991.

Colony Capital, based in Los Angeles, last month closed Colony Investors IV LP raising $611 million, including an investment from its new partner. Pacific Capital will invest in all future Colony funds, but they will continue under the management and direction of Barrack. Barrack will also join Pacific Capital as a managing director.

Pacific Capital, based in Beverly Hills, California, has disclosed little about its activities. Founded in 1985, the firm provides capital to companies worldwide mainly in telecommunications, technology and financial services, including investments in Value America Inc., WorldPort Communications, Aegis Consumer Funding Group Inc., and NextWave Telecom Inc. In addition to Winnick and Barrack, Pacific Capital’s management team consists of co-chairman Lodwrick Cook, chief financial officer Gregg Ritchie, and managing directors Thomas Casey, Mike Steed and former California Governor Pete Wilson.