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New York (HedgeCo.Net) – Clients of Fortress Investment Group LLC have requested to withdraw more than $4.5 billion of their assets over the next few months, according a statement released by the hedge fund yesterday.
The company reported its first annual loss since going public, mostly due to its Drawbridge Global Macro funds losing over 13 percent this year through the end of September. If investors have their way, this would take a 25 percent chunk out of the total assets under Fortress’s management.
Fortress isn’t the only hedge fund dealing with a hit of investor withdraws. The sour economy and recent credit crisis has sent a wave of panic over some investors, prompting them to rush for redemptions. Some hedge funds choose to “freeze” investor withdraws until the market takes a turn for the better, or until they can figure out how to wind down the fund in an orderly manner.
Fortress said it received $2.6 billion in redemption requests for its liquid hedge funds, which include the Drawbridge Global funds and the Fortress Commodities funds. Its hybrid hedge funds, which include the Drawbridge Special Opportunities funds which saw a drop of over 7 percent in the third quarter, and the Fortress Partners funds, will lose $1.9 billion in capital because of the withdraws.
Fortress reported a third-quarter loss of $20 million, equivalent to 4 cents a share. A year earlier, they were posting a profit of around 26 cents a share. The company currently manages $34.3 billion in assets, a 2.1 percent drop from last quarter.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Metro Canada – A company that will play a key role in the Vancouver 2010 Olympic Games ended rampant speculation about its financial well-being Thursday by completing a deal to refinance a $1.7-billion loan – just hours before deadline.
Intrawest ULC owns and operates major tourism venues across the country but is best known for its Whistler-Blackcomb ski resort, one of the main venues for the Winter Games.
The destination-resort company received unanimous support from its existing lender group Thursday to refinance.
Intrawest CEO Bill Jensen said he’s pleased to have reached an agreement with Fortress Investment Group LLC (NYSE:FIG), "particularly given the challenges of the global credit markets."
"The support Fortress and our lenders have shown underscores their confidence in Intrawest and will enable us to continue to execute our long-term strategic plans," Jensen said in a statement.
FT – Reuters – Fortress Investment Group LLC, one of the few publicly traded managers of private equity and hedge funds, is taking action to keep two of its companies afloat, the Financial Times said, quoting people familiar with the situation.
Fortress is struggling to preserve the value of its investments in Intrawest, a ski resort company based in Canada that has $1.68 billion in debt due on October 23, and Gagfah, a German residential real estate group that is seeking to raise additional equity to comply with the terms of its debt, the paper reported on its Website.
People familiar with Fortress say there is a low probability Intrawest will file for Chapter 11 bankruptcy protection, the Financial Times said.
West Palm Beach (HedgeCo.net) – Wall Street Journal columnist Gregory Zuckerman and Ely Razin, senior director of strategy, Westlaw Business, will deliver a luncheon presentation on "State of the Hedge Funds for 2008" at a upcoming Hedge Fund General Counsel Summit, according to Incisive Media, publisher of Corporate Counsel magazine.
The event will take place September 25, 2008 at The Sheraton Hotel in Stamford, Connecticut. Targeted to general counsel and deputy counsel in the hedge fund industry, the one-day conference will present insights into the current state of the industry in today’s uncertain times.
Zuckerman writes the "Heard on the Street" column for the Wall Street Journal and authored two recent articles on hedge funds: "Shakeout Roils Hedge Fund World" and "Hedge Funds Are Caught in a Tight Spot." He recently won the NY Press Club Journalism award, and was nominated for a 2008 Gerald Loeb award for coverage of the mortgage meltdown. Zuckerman is a frequent commentator for CNBC on hedge funds and stocks.
Additional industry experts and practitioners who will be speaking at the conference include, Tia Breakley, vice president, The Blackstone Group LP, David Brooks, managing director & deputy GC, Fortress Investment Group LLC, and Simon Lorne, vice chairman and chief legal officer, Millennium Management LLC.
Corporate Counsel’s Hedge Fund General Counsel Summit is part of Incisive Media Conferences & Trade Shows, a producer of educational and networking events for business leaders and professionals.
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New York (HedgeCo.Net) – Fortress Investment Group, who oversees more than $18 billion in assets, is starting a new hedge fund that will invest in markets throughout the Middle East and North Africa.
The new fund, Fortress MENA, is set to launch near the end of September and seeks returns of 20 percent annually, according to insider documents obtained by Bloomberg. Headed by Philippe Peres, who has run the company’s Drawbridge Global Macro funds for the past five years, the fund will use a “significant” amount of its employee’s personal capital to launch. The documents did not state how much money the fund aimed to raise up front.
Fortress MENA will deal with equities, fixed-income securities and currencies throughout regions seeking to reduce their oil dependencies. This includes countries such as Lebanon, Qatar, Pakistan and Turkey.
This will be the fifth hedge fund in the company’s portfolio. Fortress went public in February, but has seen shares decrease 36 percent this year compared to the 13 percent decline of the Standard & Poor’s 500 Index. Shares are trading almost 50 percent below their initial offering of $18.50.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Wall Street Journal – Eager to keep one of its key employees, publicly traded Fortress Investment Group LLC has lavished a $300 million share grant on one of its star traders, 38-year-old Adam Levinson.
Mr. Levinson, who also is the chief investment officer of one the firm’s main funds, joins the private-equity and hedge-fund giant’s five other controlling shareholders, who together hold some $3 billion of company stock. These executives haven’t sold any shares since the company went public in 2007 and own 77% of the business.
Fortress has struggled mightily in its 18 months as a public company, losing two-thirds of its peak value amid brutal markets for financial firms.
Mr. Levinson’s windfall — which was alluded to in a May filing with the Securities and Exchange Commission — highlights the quandary of publicly traded private-investment outfits. On the one hand, they must compensate elite traders and dealmakers richly enough so they don’t leave for a competitor or start their own firms. The heads of large private hedge funds such as Citadel Investment Group and Paulson & Co. can — and have — earned billions of dollars in a single year.
