Founded in 1998, Fortress Investment Group started as a private equity firm and in later years became an investment management firm which oversees assets worth $70.2 billion. These alternative assets include private equities, liquid hedge funds, and credit funds. Formed by five investors: Wesley “Wes” Edens, Randal Nardone, Michael Novogratz, Peter Bridger, Jr., and Robert Kauffman, it became the first publicly traded private equity firm on the New York Stock Exchange in 2007. Its founders all had previous experience in finances, helping the firm to climb to its success. Currently, Nardone is Fortress’s CEO; Edens and Bridger are both Chairmen of the Board of Directors.
After formation, Fortress rapidly grew in size, its equity between 1999 and 2006 gained 39.7%.
In 2014, Institutional Investor heralded Fortress as “Hedge Fund Manager of the Year,” and HFMK continued the sentiment by naming them “Managment Firm of the Year.” Since 2010, the firm, on several occasions, won recognition from Institutional Investor, a monthly magazine. With over $70.2 billion worth of assets, they were experts.
So in 2017, SoftBank purchased Fortress for $3.3 billion. With the ability to operate with their existing management team the firm became a subsidiary of SoftBank, adding to its own list of assets.
Before all their recognition though, in 2009 Fortress almost became a penny stock as it was affected profoundly by the subprime mortgage crisis. Wes Edens with the support of other members of the company saved it by making smart investments and leveraging their assets, rising above the market setback.
Over the years, Fortress has held a diverse portfolio of assets. Intrawest, a Canadian Ski resort is included, acquired in 2006 by Fortress managed Funds. The same year, they also acquired RalAmerica, Inc., but it was sold three years later through an IPO. For $3.4 billion, they went on to purchase Florida East Coast Industries in 2007. That same year, in partnership with Centerbridge Partners, obtained Penn National Gaming valued at $6.1 billion, but the deal was later canceled as the market was deemed unstable. As a result, Penn was given an interest-free loan, and Wes Edens was appointed to their board.
Fast-forward to 2017, with its share of success and failures; Fortress was on the radar of SoftBank Group.
A multinational holdings company based out of Tokyo, SoftBank Group Corp. is better is better known for its technology and communication prowess. Though, its potential purchase of Fortress it was hoping to become an investment management expert overnight. Fortress had proven that they were no slouch, led by Wes Edens’s unorthodox investment styles.
With a new parent company, Fortress continued to operate as usual. Just before the purchase was finalized, they provided a loan to Weinstein Co to help them stay afloat for the year to come. In early 2018, they also loaned $100 million to Theranos, a medical startup.
Since its inception, Fortress has led a successful business operation with smart people leading the push. Only now the future will determine just how successful they will become.
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