Colony Capital and Shanghai Industrial Announce Initial Closing of First Dedicated Special Situations Fund Focused on Greater China.

Business Editors

HONG KONG--(BUSINESS WIRE)--April 22, 2004

Colony Capital Asia Pacific Pte Ltd. (Colony Capital) and a unit of Shanghai Industrial Investment Corporation (Shanghai Industrial) announced today the initial closing of the first China-focused special situations fund.

The Yangtze Special Situations Fund, L.P., sponsored by a joint venture between Colony Capital and Shanghai Industrial, had a first closing of approximately $100 million. The fund will invest in the People's Republic of China and, to a lesser extent, Hong Kong and Macau, targeting nonperforming loans, distressed assets, and distressed companies and financial institutions. The investments will be sourced and managed by Colony and Shanghai Industrial professionals in China. Colony is one of the earliest private equity firms in Asia and has invested more than $600 million in over 3,500 assets in the region since 1998.

The Fund has secured commitments from such prominent anchor investors as the International Finance Corporation and Asian Development Bank as well as other international financial institutions. The International Finance Corporation will also participate in the fund's general partner. The fund is targeting total equity commitments of $500 million and will use leverage to augment its financial strength.

"This is an exciting new venture for Colony Capital," said Thomas J. Barrack, Jr., chairman and CEO of Colony Capital and initial CEO of the Yangtze Special Situations Fund. "The Chinese government and business community are aligned in their determination to rectify many of the nation's nonperforming and inefficient assets. We welcome the opportunity to become involved in that important effort. Our partner, Shanghai Industrial, is one of the leading businesses in China with an excellent reputation and significant government and business relationships that will be crucial in the process."

"Colony Capital is one of the leading private equity firms with a more than 13-year track record of success in restructuring, repositioning, developing and managing distressed or underperforming assets," said Chen Wei Shu, vice chairman of Shanghai Industrial. "Colony is highly regarded in Asia and their international experience in deal-sourcing and execution make this a very exciting venture."

About Colony Capital

For over 13 years, Colony Capital has invested over $10 billion worldwide in over 5,000 assets through various corporate, portfolio, and complex distressed transactions. Colony has a staff of over 100 and is headquartered in Los Angeles, with offices in New York, Paris, London, Rome, Madrid, Beirut, Hawaii, Tokyo, Taipei, Hong Kong, Shanghai and Seoul.

About Shanghai Industrial

Shanghai Industrial, incorporated in 1981, is one of the leading Chinese conglomerates with more than $4 billion in assets. Based in Hong Kong with executive headquarters in Shanghai, Shanghai Industrial has expanded to over a dozen offices in China and nine international offices located in the United States, Japan, Russia, Australia, Germany, Brazil, South Africa, Singapore and Dubai. Shanghai Industrial has been a leader in promoting investment and development of nascent industries in China.

These materials do not constitute or form part of any offer for sale or subscription of or solicitation of any offer to buy or subscribe for any securities or other interests in Yangtze Special Situations Fund L.P. These materials have been prepared exclusively for information purposes only.