Fortress Investment Group said its second-quarter profit rose by 9% as some of its funds, particularly its credit hedge funds, turned in strong performances, boosting incentive fee income.
The New York-based alternative investments giant said its pre-tax distributable earnings, which exclude costs related to its 2007 initial public offering, was $50 million on the quarter, up from $46 million in the second quarter of last year. The number was in line with analysts' expectations.
Fortress said net income attributable to Class A shareholders was $5 million, up from a $95 million loss in the year-earlier period. The dramatic change is due the expiration of a principals agreement at the end of last year.
While Fortress' main funds were all up in the third quarter, more than doubling its performance fee income to $47 million, the news was not all good. Management fee income fell as investors pulled $600 million, including from Fortress' commodities fund, which the firm shuttered in May. In addition, pre-tax distributable earnings from its private equity and hedge fund businesses fell.
Still, Fortress was able to report that assets under management rose 3% on the quarter to $47.8 billion.
Fortress said it would pay a five cent per share dividend.