In the last trading session, the stock price of Fortress Investment Group LLC (NYSE:FIG) declined more than 1% to close the day at $7.81. The decline came at a share volume of 9.8 million compared to average share volume of 1.40 million. Fortress reported its second quarter results back in August, wherein it stated that GAAP net income came at $32 million compared to $27 million, for the Q2 2016.
Fortress’s business mechanism is highly diversified, and management considers that this positions the firm to capitalize on prospects for capital formation, harvesting profits and investing that can happen at different points in any cycle for their individual businesses. The company’s business model generates predictable and stable management fees, which is an outcome of the majority of firm’s alternative AUM existing in long-term investment structures.
Fortress’s alternative investment operations also generate variable incentive income depending on performance, and this incentive income can add meaningfully to financial performance. Balance sheet investments exhibit a third component of company’s business model, and the firm has built notable value in these investments, which are done in Fortress funds combined with the funds’ limited associates.
Fortress raised capital of $1.6 billion across alternative investment businesses in 1H2017. Pertaining investment performance summary as of the close of June 30, 2017, yearly inception-to-date net IRRs for “FCO”, FCO II and FCO III was 23.1%, 15.9% and 10.5%, in the same order Net returns of 1.2% in Q2 2017 for the Drawbridge Special Opportunities Fund LP 14 of 16 Logan Circle plans outdone respective benchmarks in the Q2 2017.
Post quarter end, Fortress reported that it had finalized a definitive deal pursuant to which it will offer Logan Circle Partners, L.P. to MetLife, Inc. for around $250 million. Management Fee Paying AUM came at $72.4 billion as of the close of June 30, 2017, up 3% over the previous quarter.
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