Fortress Investment Group to Shutter Macro Fund

Oct 12 2015 | 6:23pm ET

Fortress Investment Group is planning to close its macro hedge fund, run by Michael Novogratz, following two years of losses.

The decision will result in Novogratz leaving the company, according to a Bloomberg article, although timing of his departure has not been released. The macro fund will be liquidated.

The macro fund, which bets on currencies, commodities, stocks and bonds, lost 4.67% in September, the latest blow in a dismal year for the former Goldman Sachs executive and U.S. Army helicopter pilot who started the firm’s macro business in 2002 and helped build it to $8.1 billion in AUM at its pre-crisis peak.

For the year to date, the macro fund is down a staggering 17.49%, according to securities filings, following a 1.6% loss in 2014. 

The fund’s assets fell to $2.3 billion as of June of this year, according to Bloomberg, with $1 billion in the fund and the remainder in client accounts. Fortress will inform fund investors about the liquidation over the coming days, according to the article, which cited an unidentified person familiar with the matter. 

Following co-manager Jeff Feig’s departure in July, Novogratz became the sole manager of the macro strategy.

Shares of publicy traded Fortress were down more than 3% in Monday trading. Founded in 1998, Fortress manages approximately $70 billion across hedge fund, private equity, and managed account investments. It was the first private equity and hedge fund manager to sell shares to the public when IPO’d in February 2007 at $18.50. 

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