Publicly-traded hedge fund Fortress Investment Group’s first earnings report revealed a mixed bag: a big loss, but increased assets under management, management fees and revenues from its private equity and hedge fund product lines.
First the bad news: The firm reported a net loss of $71.8 million for the first quarter since its January reorganization. It also reported net income of $62.1 million in the first quarter compared to $130.1 million for the same period last year.
However, the firm reported total assets under management of $36 billion, an increase of 72% from 2006. Fortress generated total revenues of $383 million, which included management fees of $98 million and incentive income of $285 million. The firm’s p.e. business accounted for approximately 57% of its total revenues while its hedge fund business accounted for approximately 39%. Its Castles business, which is made up of publicly-traded alternative investment vehicles, accounted for approximately 4% of total revenues.
In addition, the firm said that it has closed on $2.8 billion of third-party commitments for its newly launched private equity fund, which is being raised to make control investments in asset-based businesses and asset portfolios primarily in North America and Western Europe. The fund is ultimately expected to have approximately $5 billion of capital commitments with third party capital a capped at $4 billion, and approximately $1 billion is expected to come from its principals, employees and affiliated funds managed by Fortress.