Fortress’ private equity assets soar 64 percent(3)

Fortress’ private equity assets totalled $23.4 billion in the second quarter, a 64 percent year-over increase.

Publicly traded alternative asset manager Fortress Investment Group grew its private equity assets under management to $23.4 billion (€17 billion) by the quarter ended 30 June, representing a 64 percent increase from the same period last year.

Private equity accounted for approximately 54 percent of the firm’s $43.3 billion under management at the close of the second quarter, which is a year-over increase of 70 percent.

The figures do not take into account the July closings of two Fortress private equity funds with commitments of $5 billion. Fortress Investment Fund V closed on $4 billion, and an additional $1 billion in commitments is expected from Fortress affiliates and employees. Fortress Coinvestment Fund V closed on $1 billion. 

Though the firm’s assets rose significantly, its revenue dropped – a stark contrast to The Blackstone Group’s tripled second quarter earnings, as PEO reported yesterday.

Fortress suffered losses of $55 million, or 66 cents per share, a nearly 31 percent increase from its losses of $42 million reported during the same period last year.

Fortress said in its earnings report that its quarterly earnings and distrubtions “will fluctuate materially depending upon the realization events within our private equity business, as well as other factors” and should not be considered indicative of future results.

Its private equity division generated $28 million in pre-tax revenue during the second quarter, as opposed to $69 million in the second quarter of 2006. The firm also said it received no incentive income from private equity during the quarter ended 30 June, but that it had realized $56 million, net employee allocations, during the third quarter.

Fortress stock had dropped more than 8.5 percent to $18.82 per share in afternoon trading on the New York Stock Exchange. The asset manager took a portion of its management company public last year, at an issue price of $18.50 per share.