Nomura to buy stake in Fortress(3)

New York-based private investment giant Fortress Investment, which is preparing for an IPO, will sell a 15 percent stake to Tokyo-based Nomura Holdings in a deal worth $888m.

New York-based private equity firm Fortress Investment Group has agreed to sell 15 percent of itself to Tokyo-based Nomura Holdings, a global financial services group, for approximately $888 million, Fortress said in a statement. Following the completion of the deal, which is expected to close in January of 2007, Nomura will own Class A shares of Fortress.

“This transaction is expected to facilitate the expansion of Fortress’s business in Asia,” the statement said. Fortress already has an office in Australia and offices in London, Rome and Frankfurt.

In November, Fortress filed to go public on the New York Stock Exchange. The firm plans to raise up to $750 million through the listing of Class A shares, representing 10 percent of the company. Fortress’s five principals—Peter Briger, Wesley Edens, Robert Kauffman, Randal Nardone and Michael Novogratz—own the remaining 90 percent of the firm through Class B shares, the firm’s S-1 filing with the Securities and Exchange Commission said. 

Edens, Kauffman and Nardone, who met while working at former Blackstone partner Larry Fink’s debt-focused investment firm BlackRock, founded Fortress in 1998. The firm, with 26 billion in assets under management, focuses on private equity and hedge funds, as well as publicly traded alternative investment vehicles.

Founded in 1925, Nomura provides investment consultation and brokerage services in Japan and provides securities underwriting, investment banking advisory services, merchant banking and asset management globally. The company’s clients include individuals, institutions, corporations and government groups, the statement said. It has more than 140 branches in Japan and more in 29 other countries. It is publicly traded on the Tokyo, Osaka, Nagoya and Singapore stock exchanges, according to the company’s website. It also is listed on the New York Stock Exchange.