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Fortress Investment Group is an American
investment management Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be instit ...
firm based in New York City. Fortress was founded as a
private equity In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a t ...
firm in 1998 by
Wes Edens Wesley Robert Edens (born October 30, 1961) is an American billionaire businessman and private equity investor. He is the co-founder of Fortress Investment Group and founder of New Fortress Energy. Edens is co-owner of the Milwaukee Bucks NBA fran ...
, Rob Kauffman, and Randal Nardone. When Fortress launched on the
NYSE The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its liste ...
in February 2007, it was the first large private equity firm in the US to be traded publicly. As of June 30, 2020, the firm manages approximately $45.5 billion alternative assets in private equity, liquid
hedge funds A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as ...
and credit funds.


History


1998–2010

Fortress Investment Group LLC was founded as a private equity firm in 1998 by Wesley R. Edens, a former partner at
BlackRock BlackRock, Inc. is an American multi-national investment company based in New York City. Founded in 1988, initially as a risk management and fixed income institutional asset manager, BlackRock is the world's largest asset manager, with trill ...
; Rob Kauffman, a managing director at
UBS UBS Group AG is a multinational investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres as the largest Swi ...
; and Randal A. Nardone, also a managing director at UBS. Fortress quickly expanded into hedge funds, real estate-related investments and
debt securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...
, run by Michael Novogratz and Pete Briger, both former partners at
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, Ho ...
. Fortress's investments grew rapidly, with its private equity funds netting 39.7% between 1999 and 2006. When Fortress launched on the
NYSE The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its liste ...
on February 9, 2007 with Goldman Sachs and
Lehman Brothers Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, ...
underwriting the IPO, it was the first large private equity firm in the United States to be traded publicly. In the wake of the economic downturn of 2008, ''
Forbes ''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also r ...
'' included 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 company's flagship fund". Fortress and its principals were subsequently featured in an April 2009 ''
Vanity Fair Vanity Fair may refer to: Arts, entertainment and media Literature * Vanity Fair, a location in '' The Pilgrim's Progress'' (1678), by John Bunyan * ''Vanity Fair'' (novel), 1848, by William Makepeace Thackeray * ''Vanity Fair'' (magazines), the ...
'' article on the adverse economic conditions facing
hedge fund A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as ...
s.


2010–present

In 2014, Fortress was named "Hedge Fund Manager of the Year" by ''
Institutional Investor An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked ...
'' and "Management Firm of the Year" by ''HFMWeek''. Fortress has previously been recognized by ''Institutional Investor'' as “Discretionary Macro-Focused Hedge Fund of the Year” for 2012, and “Credit-Focused Fund of the Year” for both 2011 and 2010. In Autumn 2014, Fortress hired Jeff Feig, formerly the Global Head of Foreign Exchange at
Citigroup Citigroup Inc. or Citi ( stylized as citi) is an American multinational investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking giant Citicorp and financial conglomera ...
to join Novogratz as co-CIO of the Fortress Macro Fund. However, 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. According to the firm, Novogratz, the remaining CIO, was expected to retire from the firm by the end of 2015. As of June 30, 2016, Fortress Investment Group had four core businesses totaling approximately $70.2 billion of assets under management:
private equity In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a t ...
, credit, liquid markets and traditional asset management (Logan Circle Partners was acquired in April 2010). On February 14, 2017,
SoftBank Group is a Japanese multinational conglomerate holding company headquartered in Minato, Tokyo which focuses on investment management. The Group primarily invests in companies operating in technology, energy, and financial sectors. It also runs the Vi ...
agreed that in the future it would buy Fortress Investment Group LLC for $3.3 billion. The SoftBank acquisition was completed in the last week of December, for $3.3 billion to SoftBank Group Corp. In the wake of the
Harvey Weinstein Harvey Weinstein (; born March 19, 1952) is an American former film producer and convicted sex offender. He and his brother, Bob Weinstein, co-founded the entertainment company Miramax, which produced several successful independent films includ ...
sexual assault scandal, in late October 2017, it was reported that Fortress Investment Group was in talks to provide a loan to Weinstein Co. In December 2017, Fortress Investment Group loaned $100 million to the medical startup
Theranos Theranos Inc. () was an American privately held corporation that was touted as a breakthrough health technology company. Founded in 2003 by then 19-year-old Elizabeth Holmes, Theranos raised more than US$700 million from venture capitalists a ...
. Theranos had reportedly been on the verge of
bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debto ...
, with the loan to keep them solvent through 2018. At the time, Fortress also had "underdog" bets in a private passenger rail line in Florida. By January 3, 2018, however, the company had divested itself of
Florida East Coast Railway The Florida East Coast Railway is a Class II railroad operating in the U.S. state of Florida, currently owned by Grupo México. Built primarily in the last quarter of the 19th century and the first decade of the 20th century, the FEC was a p ...
and Logan Circle Partners. It remained the parent company of the Brightline passenger rail in Florida, however, which is the only privately owned and operated passenger railroad in the United States. Fortress Investment Group is also investing in the construction of
Brightline West Brightline West is a proposed privately run high-speed rail route linking Las Vegas Valley and Rancho Cucamonga in the Greater Los Angeles area through the California high desert. The line will connect with existing rail at Rancho Cucamonga ...
, a high speed rail route between Las Vegas and Southern California. The route is being advertised as “A Brightline Company.” On January 3, 2018, it was reported that Fortress was nearing a deal to sell its stake on OneMain to
Apollo Global Management Apollo Global Management, Inc. is an American global private-equity firm. It provides investment management and invests in credit, private equity, and real assets. As of March 31, 2022, the company had $512 billion of assets under management, ...
. The agreement was announced on January 5, with Varde Partners also taking part in the purchase. In 2020, Fortress Investment increased its bid for Japanese company Unizo to roughly $1.6 billion.


Portfolio companies

In 2006, Fortress-managed funds acquired Canadian
ski resort A ski resort is a resort developed for skiing, snowboarding, and other winter sports. In Europe, most ski resorts are towns or villages in or adjacent to a ski area – a mountainous area with pistes (ski trails) and a ski lift system. In Nort ...
operator
Intrawest Intrawest Resorts Holdings, Inc was a developer and operator of destination resorts and a luxury adventure travel company. The company was founded in 1976 as a privately funded real estate development company. In 2006, Intrawest was purchased by ...
, North America's largest ski resort operator that also operated luxury
adventure travel Adventure travel is a type of niche tourism, involving exploration or travel with a certain degree of risk (real or perceived), and which may require special skills and physical exertion. In the United States, adventure tourism has grown in ...
brands such as Abercrombie & Kent, which was sold in August, 2016. In November 2006, RailAmerica 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 via
initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...
in October 2009. In May 2007, Florida East Coast Industries (FECI), parent company of
Florida East Coast Railway The Florida East Coast Railway is a Class II railroad operating in the U.S. state of Florida, currently owned by Grupo México. Built primarily in the last quarter of the 19th century and the first decade of the 20th century, the FEC was a p ...
, announced that following a unanimous vote of the FECI Board of Directors, a Fortress-managed fund would acquire FECI in a transaction valued at $3.5 billion. The
Surface Transportation Board The Surface Transportation Board (STB) of the United States is a federal, bipartisan, independent adjudicatory board. The STB was established on January 1, 1996, to assume some of the regulatory functions that had been administered by the Interstat ...
approved 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). In June 2007, Fortress announced that it would partner with
Centerbridge Partners Centerbridge Partners is a multi-strategy private investment firm focused on leveraged buyouts and distressed securities. The firm manages over $32 billion of assets
to acquire Penn National Gaming, an operator of casinos and horse racing venues, for $6.1 billion. Penn National shareholders were to receive $67 cash for each share. In July 2008, Fortress backed away from the agreement amidst the uncertain economic climate. Under the termination agreement, Penn National received $1.475 billion, consisting of a breakup fee of $225 million and an interest-free $1.25 billion loan from Fortress, Centerbridge,
Wachovia Wachovia was a diversified financial services company based in Charlotte, North Carolina. Before its acquisition by Wells Fargo and Company in 2008, Wachovia was the fourth-largest bank holding company in the United States, based on total asset ...
and
Deutsche Bank Deutsche Bank AG (), sometimes referred to simply as Deutsche, is a German multinational investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed on the Frankfurt Stock Exchange and the New York St ...
. Fortress co-chairman Wesley Edens assumed a seat on the board of Penn National as part of the agreement. Fortress has taken several of its portfolio companies public, such as Aircastle Ltd., Brookdale Senior Living Inc., GAGFAH and RailAmerica, Inc. Fortress has said it lost $125 million purchasing fraudulent
promissory note A promissory note, sometimes referred to as a note payable, is a legal instrument (more particularly, a financing instrument and a debt instrument), in which one party (the ''maker'' or ''issuer'') promises in writing to pay a determinate sum of ...
s from Marc Dreier, who had been operating a
Ponzi scheme A Ponzi scheme (, ) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are comin ...
. Fortress filed a lawsuit against the
law firm A law firm is a business entity formed by one or more lawyers to engage in the practice of law. The primary service rendered by a law firm is to advise clients (individuals or corporations) about their legal rights and responsibilities, and to ...
Dechert in an attempt to recover the loss. The lawsuit was filed in New York state court, alleging Dechert issued a "false" legal opinion letter that Dreier used to defraud Fortress. Fortress's private equity investment portfolio includes Aircastle Limited, Alea Group Holdings (Bermuda) Ltd., AMRESCO, Boxclever, Capstead Mortgage Corporation, CW Financial Services, Eurocastle Investment Limited, Flagler, Florida East Coast Railway, GAGFAH, GateHouse Media, Inc., Global Signal, Inc., Green Tree Servicing LLC, Holiday Retirement,
Intrawest Intrawest Resorts Holdings, Inc was a developer and operator of destination resorts and a luxury adventure travel company. The company was founded in 1976 as a privately funded real estate development company. In 2006, Intrawest was purchased by ...
, 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 Financial,
Umami Burger Umami Burger is an American restaurant chain that specializes in gourmet hamburgers. The name refers to umami (savory) flavor. The restaurant was founded by Adam Fleischman, and is part of the Umami Restaurant Group. Umami Burger has waiter se ...
, and IPCom GmbH & Co. KG. In January 2014, Fortress was the winning bidder for the assets of the Montreal, Maine and Atlantic Railway, a line bankrupted after the July 6, 2013 Lac-Mégantic derailment of a runaway train loaded with crude oil obliterated much of historic downtown Lac-Mégantic, Quebec, causing 47 fatalities. In 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 the Central Maine and Quebec Railway, as it is in poor condition and currently not safe for the transport of oil or dangerous goods. The sale was completed in May 2014, for US$15.85 million. In October 2014, it was reported by the '' Birmingham Business Journal'' that Fortress had purchased the Inverness Corners retail center. Fortress Investment Group is also the parent company to Mystays hotels and resorts in Japan.


Controversies


Intrawest late payment & Olympic village funds

Fortress Investment Group was the primary lender to Millennium Development Group for building the C$875 million athlete's village for the
2010 Winter Olympics )'' , nations = 82 , athletes = 2,626 , events = 86 in 7 sports (15 disciplines) , opening = February 12, 2010 , closing = February 28, 2010 , opened_by = Governor General Michaëlle Jean , cauldron = Catriona Le May DoanNancy Greene Wayne G ...
in Southeast False Creek,
Vancouver Vancouver ( ) is a major city in western Canada, located in the Lower Mainland region of British Columbia. As the most populous city in the province, the 2021 Canadian census recorded 662,248 people in the city, up from 631,486 in 2016. ...
,
British Columbia British Columbia (commonly abbreviated as BC) is the westernmost province of Canada, situated between the Pacific Ocean and the Rocky Mountains. It has a diverse geography, with rugged landscapes that include rocky coastlines, sandy beaches, for ...
. 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. The 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. "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." The village was completed in November 2009. Three weeks before the opening of the
2010 Winter Olympics )'' , nations = 82 , athletes = 2,626 , events = 86 in 7 sports (15 disciplines) , opening = February 12, 2010 , closing = February 28, 2010 , opened_by = Governor General Michaëlle Jean , cauldron = Catriona Le May DoanNancy Greene Wayne G ...
in
Vancouver Vancouver ( ) is a major city in western Canada, located in the Lower Mainland region of British Columbia. As the most populous city in the province, the 2021 Canadian census recorded 662,248 people in the city, up from 631,486 in 2016. ...
, Fortress failed to make payment on its loan used to buy out
Intrawest Intrawest Resorts Holdings, Inc was a developer and operator of destination resorts and a luxury adventure travel company. The company was founded in 1976 as a privately funded real estate development company. In 2006, Intrawest was purchased by ...
. This caused its creditors to force Intrawest to divest itself of several of its resort holdings in 2009 and 2010 in order to reduce its debt load. Fortress Investment became the owner of the village after the
2010 Winter Olympics )'' , nations = 82 , athletes = 2,626 , events = 86 in 7 sports (15 disciplines) , opening = February 12, 2010 , closing = February 28, 2010 , opened_by = Governor General Michaëlle Jean , cauldron = Catriona Le May DoanNancy Greene Wayne G ...
.


VLSI Technology LLC & INVT SPE LLC

VLSI Technology LLC & INVT SPE LLC are non-operating subsidiaries of Fortress Investment that have filed several lawsuits against
Apple An apple is an edible fruit produced by an apple tree (''Malus domestica''). Apple trees are cultivated worldwide and are the most widely grown species in the genus '' Malus''. The tree originated in Central Asia, where its wild ancest ...
,
Intel Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is one of the developers of the x86 ser ...
,
HTC HTC Corporation ( zh, t=宏達國際電子股份有限公司, s=宏达国际电子股份有限公司, p=Hóngdá Guójì Diànzǐ Gǔfèn Yǒuxiàn Gōngsī, first=t) or High Tech Computer Corporation, (literally ''Hongda International Electron ...
,
ZTE ZTE Corporation is a Chinese partially state-owned technology company that specializes in telecommunication. Founded in 1985, ZTE is listed on both the Hong Kong and Shenzhen Stock Exchanges. ZTE's core business is wireless, exchange, op ...
and other telecommunications companies. In 2019, VLSI Technology LLC alleged Intel's
SpeedStep Enhanced SpeedStep is a series of dynamic frequency scaling technologies (codenamed Geyserville and including SpeedStep, SpeedStep II, and SpeedStep III) built into some Intel microprocessors that allow the clock speed of the processor to be dyna ...
technology introduced in 2005 infringes on its patent purchased. INVT SPE LLC was assigned 740 telecommunications patents originally filed by
Panasonic formerly between 1935 and 2008 and the first incarnation of between 2008 and 2022, is a major Japanese multinational conglomerate corporation, headquartered in Kadoma, Osaka. It was founded by Kōnosuke Matsushita in 1918 as a lightbulb ...
after Fortress Investment acquired Inventergy Global, Inc. and restructured it.


Labrador Diagnostics

On March 9, 2020, Fortress Investment, through its
non-operating subsidiary In the United States, a paper railroad is a company in the railroad business that exists "on paper only": as a legal entity which does not own any track, locomotives, or rolling stock. In the early days of railroad construction, paper railroads h ...
Labrador Diagnostics (which holds patents previously owned by Theranos), alleged that BioFire's FilmArray technology infringes upon some of its patents. However, on March 3, 2020, the
Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
published an article identifying that
bioMérieux bioMérieux SA is a French multinational biotechnology company founded and headquartered in Marcy-l'Étoile, France, close to Lyon. bioMérieux is present in 44 countries and serves more than 160 countries through a large network of distributor ...
was working on two diagnostic tests for COVID-19. After the patent infringement lawsuit was filed, bioMérieux issued a press release announcing that BioFire was developing tests to detect SARS-CoV-2. After this announcement, Labrador issued a statement claiming that when it filed the lawsuit against BioFire it had no idea BioFire was developing COVID-19 testing kits. Fortress Investment Group subsequently offered to grant both the defendants and anyone else a royalty-free license for its technology for use in COVID-19 tests.


Key people

*Randal A. Nardone:
CEO A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
, co-founder, principal * Wesley R. Edens: co-founder, principal *Peter L. Briger: principal


Board of directors

* Wesley R. Edens: co-chairman *Peter L. Briger: co-chairman *Randal A. Nardone *David B. Barry *Douglas L. Jacobs *Michael G. Rantz *George W. Wellde, Jr.


See also

*
List of asset management firms An asset management company (AMC) is an asset management / investment management company/firm that invests the pooled funds of retail investors in securities in line with the stated investment objectives. For a fee, the company/firm provides more ...
*
List of hedge funds Below is a list of notable hedge funds. Largest hedge fund firms Below are the 20 largest hedge funds in the world ranked by discretionary assets under management (AUM) as of mid-2022. Only assets in private funds following hedge fund strat ...


References


External links

* {{authority control Companies formerly listed on the New York Stock Exchange Investment management companies of the United States Hedge funds Hedge fund firms in New York City Financial services companies established in 1998 1998 establishments in the United States Private equity firms of the United States SoftBank Group 2017 mergers and acquisitions 2007 initial public offerings