Peter L. Briger: Principal and Co-Chairman of the Board of Directors
Investment Management Firm: Private Equity, Credit Funds, Railroads, Hedge Funds and Traditional Asset Management
Fortress Investment Groupis aninvestment managementfirm based inNew York City.3Fortress Investment Group LLC was founded as a private equity firm in 1998 byWesley R. EdensRob Kauffman, and Randal Nardone.4When Fortress launched on theNYSEon February 9, 2007, it was the first large private equity firm in the United States to be traded publicly.56As of June 30, 2016, the firm managed approximately $70.2 billionalternative assetsinprivate equity, liquidhedge fundsand credit funds.7
Fortress Investment Group LLC was founded as a private equity firm in 1998 byWesley R. Edens, a former partner atBlackRockRob Kauffman, a managing director atUBS; and Randal A. Nardone, also a managing director at UBS.4Fortress quickly expanded into hedge funds, real estate-related investments and debt securities, run byMichael Novogratzand Pete Briger, both former partners atGoldman Sachs.citation needed
Fortress Investment Groups investments grew rapidly, with its private equity funds netting 39.7% between 1999 and 2006.8When Fortress launched on theNYSEon February 9, 2007 withGoldman SachsandLehman Brothersunderwriting the IPO, it was the first large private equity firm in the United States to be traded publicly.56In the wake of theeconomic downturn of 2008,Forbesincluded Wesley Edens (and two other Fortress principals) among its biggest billionaire losers of 2008, noting that Edens had watched his fortune dwindle as investor redemption soared at the companys flagship fund.9Fortress and its principals were subsequently featured in an April 2009Vanity Fairarticle on the adverse economic conditions facinghedge funds.10
In 2014, Fortress Investment Group was named Hedge Fund Manager of the Year byInstitutional Investorand Management Firm of the Year byHFMWeek. Fortress has previously been recognized byInstitutional Investoras Discretionary Macro-Focused Hedge Fund of the Year for 2012, and Credit-Focused Fund of the Year for both 2011 and 2010.11In Autumn 2014, Fortress hired Jeff Feig, formerly the Global Head of Foreign Exchange atCitigroupto join Novogratz as co-CIO of the Fortress Macro Fund.12However, as of October 13, 2015, the company announced that the $2.3 billion Macro Fund was to close down and distribute its assets to investors. This development came after Feig stepped down as co-CIO of the fund in July 2015.13According to the firm, Novogratz, the remaining CIO, was expected to retire from the firm by the end of 2015.14As of June 30, 2016, Fortress Investment Group had four core businesses totaling approximately $70.2 billion ofassets under managementprivate equity, credit, liquid markets7and traditional asset management (Logan Circle Partners was acquired in April 2010).citation needed
On February 14, 2017,SoftBank Groupagreed that in the future it would buy Fortress Investment Group LLC for $3.3 billion.1516The SoftBank acquisition was completed in the last week of December, for $3.3 billion to SoftBank Group Corp.17
In the wake of theHarvey Weinsteinsexual assault scandal, in late October 2017, it was reported that Fortress Investment Group was in talks to provide a loan toWeinstein Co.18In December 2017, Fortress Investment Group loaned $100 million to the medical startupTheranos. Theranos had reportedly been on the verge of bankruptcy, with the loan to keep them solvent through 2018.192021At the time, Fortress also had underdog bets in a private passenger rail line in Florida.20By January 3, 2018, however, the company had divested itself ofFlorida East Coast Railwayand Logan Circle Partners.20It remained the parent company of the Brightline (nowVirgin Trains USA) passenger rail in Florida, however, which is the only privately owned and operated passenger railroad in the United States.22On January 3, 2018, it was reported that Fortress was nearing a deal to sell its stake on OneMain toApollo Global Management.17The agreement was announced on January 5, with Varde Partners also taking part in the purchase.23
In 2006, Fortress-managed Funds acquiredoperatorIntrawest, North Americas largest ski resort operator that also operated luxuryadventure travelbrands such as Abercrombie & Kent, which was sold in August, 2016.citation needed24
On November 15, 2006,RailAmerica Inc.announced that a Fortress-managed fund would acquire the company, offering $16.35 per share (a 32% premium). The transaction was completed in February 2007. Fortress later sold RailAmerica viainitial public offeringin October 2009.
On May 8, 2007,Florida East Coast Industries(FECI), parent company ofFlorida East Coast Railway, announced that following a unanimous vote of the FECI Board of Directors, a Fortress-managed fund would acquire FECI in a transaction valued at$3.5billion.2526TheSurface Transportation Boardapproved the transaction in September 2007. Although RailAmerica operated FEC for a time, the two were never merged, and after the RailAmerica IPO Fortress retained FEC (and still does).
On June 15, 2007, Fortress announced that it would partner withCenterbridge Partnersto acquirePenn National Gaming, an operator ofcasinosandhorse racingvenues, for $6.1 billion. Penn National shareholders were to receive $67 cash for each share. On July 3, 2008, Fortress backed away from the agreement amidst the uncertain economic climate. Under the termination agreement, Penn National receives $1.475 billion, consisting of abreakup feeof $225 million and an interest-free $1.25 billion loan from Fortress,CenterbridgeWachoviaandDeutsche Bank. Fortress co-chairman Wesley Edens assumes a seat on the board of Penn National as part of the agreement.2728
Fortress has taken several of its portfolio companies public, such asAircastle Ltd.Brookdale Senior Living Inc., GAGFAH andRailAmerica, Inc.
Fortress has said it lost $125 million purchasing fraudulentpromissory notes fromMarc Dreier, who had been operating aPonzi scheme. Fortress filed a lawsuit against thein an attempt to recover the loss.29The lawsuit was filed in New York state court, alleging Dechert issued a false legal opinion letter that Dreier used to defraud Fortress.30
Fortresss private equity investment portfolio includesAircastleLimited, Alea Group Holdings (Bermuda) Ltd.,AMRESCO, Boxclever, Capstead Mortgage Corporation, CW Financial Services, Eurocastle Investment Limited, Flagler, Florida East Coast Railway,GAGFAHGateHouse Media, Inc., Global Signal, Inc., Green Tree Servicing LLC,Holiday RetirementIntrawest, Italfondiario, Kramer Junction, Mapeley Limited, MBS Holdings, MS Hub,Nationstar Mortgage LLC, Penn National Gaming, Inc., Prime Retail,RailAmerica, RESG, Seacastle Inc., Simon Storage,Springleaf FinancialandUmami Burger.31
On January 21, 2014, Fortress Investment Group was the winning bidder for the assets of theMontreal, Maine and Atlantic Railway, a line bankrupted after the July 6, 2013Lac-Mgantic derailmentof arunaway trainloaded with crude oil obliterated much of historic downtownLac-MganticQuebec, and incinerated forty-seven of the local townfolk.32In March 2014, John E. Giles of Great Lakes Partners estimated a $10$20 million investment would be needed over three years to repair the line, which Fortress brands as theCentral Maine and Quebec Railway, as it is in poor condition and currently not safe for the transport of oil or dangerous goods.33The sale was completed on 15 May 2014, for US$15.85 million.34
In October 2014, it was reported by theBirmingham Business Journalthat Fortress Investment Group had purchased the Inverness Corners retail center.35Fortress Investment Group is also the parent company to Mystays hotels and resorts in Japan.36
In 2006, Fortress acquired Intrawest in aleveraged buyout. Three weeks before the opening of the2010 Winter OlympicsinVancouver, Fortress failed to make payment on its loan used to buy outIntrawest. This caused its creditors to force Intrawest to divest itself of several of its resort holdings in 2009 and 2010, which includesWhistler Blackcomb, in order to reduce its debt load.37
Fortress Investment Group backed a Germanpatent troll, non-manufacturing entityIPCom GmbH & Co. KG, notorious for suing Nokia for patent infringement for $17.77 billion in 2008.38Many of IPComs patents have been invalidated by the courts and millions of dollars have been incurred in legal costs.39
Fortress Investment Group was the primary lender toMillennium Development Groupfor building the C$875 million athletes village for the2010 Winter Olympicsin Southeast False Creek,VancouverBritish Columbia. Financial instability in September 2008 saw Fortress Investment Group reportedly at the brink of bankruptcy. Consequently, Fortress was unable to provide further financing to Millennium forcing the City of Vancouver to pay approximately $450 million (CAD) to complete the project in time for the Winter Olympic Games.40The City of Vancouver applied for and received legislative approval from the Province of BC to borrow as much money as required to enable the project to complete.41The village was completed in November 2009,42and Fortress Investment became the owner of the village after the 2010 Winter Olympics.43
FIG Income Statement – Fortress Investment Group LLC C Stock – Yahoo Finance.
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Fortress Investment Group LLC (FIG.N). Reuters
Fortress Investments Shares Soar After Initial Sale.
Duncan Greenberg,Americas Biggest Billionaire Losers Of 2008,
, December 16, 2008 (retrieved March 12, 2009).
Fortress Investment Group Named Institutional Investors Hedge Fund Manager of the Year. Fortress Investment Group LLC
Citigroup FX chief Jeff Feig leaving bank for FortressReuters. 17 June 2011
Fortress macro fund co-investment chief Jeff Feig leaving firmReuters. 6 July 2015
Fortress Announces Closing of Fortress Macro Fund. Fortress
Hoffman, Liz; Jenny, Strasburg; Sarah, Krouse (February 14, 2017),
SoftBank to Buy Fortress Investment Group for $3.3 Billion
Ingrid, Lunden (Feb 15, 2017).SoftBank confirms $3.3B acquisition of Fortress Investment Group.
Roumeliotis, Greg (January 3, 2018).Exclusive: Apollo nears deal for Fortress stake in OneMain – sources.
Fritz, Ben (October 25, 2017).Colony Capitals Talks to Acquire Weinstein Co. Hit Snag.
Carreyrou, John (December 24, 2018).Blood-Testing Firm Theranos Gets $100 Million Lifeline From Fortress.
Morris, David Z. (December 23, 2017).Theranos Secures $100 Million in New Funding from Fortress Capital.
Sheetz, Michael (December 26, 2017).Theranos dodges bankruptcy after $100 million loan: Report.
Broadt, Lisa (January 12, 2018).First ride: Aboard Floridas new Brightline train.
Apollo Global Partners With Varde to Buy Stake in OneMain.
Ebner, David (March 2, 2010),Fortress keeps grip on Intrawest,
, Vancouver, archived fromthe originalon November 21, 2013
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Florida East Coast Industries to Be Acquired By Funds Managed By Fortress Investment Group LLC in an All-Cash Transaction Valued at $3.5 Billion(Press release). Florida East Coast Industries. 2007-05-08
Penn National Gaming agrees to $6.1B deal – USATODAY.com.
Opalesque (22 December 2009).Fortress sues law firm Dechert over Dreier loss.
Lacter, Mark (February 26, 2013).Umami Burger shuts first store, picks up more investors for expansion.
Lac-Mgantic disasters MM&A sold to Florida Great Lakes PartnersCBC Montral. 2014-01-21
Le futur propritaire de MMA veut maintenir un lien de confiance, Rmi Tremblay, LEcho de Frontenac (March 20, 2014)
La vente de la MMA pour 17,24 M $ a t complte aux tats-Unis.
Inverness Corners sold to New York investment group.
U.S. asset manager Fortress seeks more Japan hotel investments amid…22 September 2014 via
. January 20, 2010. Archived fromthe originalon January 24, 2010
Jane Lambert.NIPC Law: Patents: Nokia GmbH and Others v IPCom GmbH & Co. 2011 EWCA Civ 6 (20 Jan 2011).
Jan Wolfe.Freshfields, Hogan Lovells Knock Out IPComs Patent Claims.
By April 2014, the City of Vancouver had paid off the entire $630 million debt of the Olympic Village project at Southeast False Creek, with $91 million being recently recouped through the sale of 67 condos for $91 million to the Aquilini Group.
Joanne Blain (January 14, 2010).Athletes Village Getting New Life After Winter GamesThe New York Times.
Howell, Mike (April 28, 2014).Updated: City of Vancouver sells final stake in Olympic Village Citys revenue projections with developer fell short $130 million. Vancouver Courier
Yahoo! Fortress Investment Group Company Profile
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Investment management companies of the United States
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