Stock Research and Analysis

by Stephen Ellis

Bulls Say

Many of Fortress' funds are finally reaching levels where they can earn incentive fees after recovering from the 2008-09 financial crisis, potentially providing significant incentive income earnings over the next few years.
Springleaf, a recent initial public offering, returned roughly 10 times Fortress' initial $125 million investment from 2010.
Fortress is focusing its new funds on mortgage servicing rights, infrastructure, senior housing, Bitcoin, and Italian loans. We like these efforts as they take advantage of Fortress' acumen rather than more general all-weather funds. Read more 

Bears Say

Fortress' capital-raising efforts have improved, particularly in 2013, but they still pale versus larger peers, which are closing significant larger funds.
The lack of a fund placement advisory service, such as Blackstone's Park Hill, puts Fortress at a disadvantage because it has less insight regarding industry asset flows and potential new funds.
Fortress lacks substantial real estate AUM, where peers have seen and continue to expect substantial inflows and profits over the next few years. Read more 

Management

Fortress has struggled in the past few years, but we think the ship is slowly being righted, and we now view stewardship at the firm as Standard, an upgrade from our prior view as Poor. Fortress earned its prior rating for its treatment of clients (restricting   Read more 

Profile

Fortress Investment Group is a diversified alternative investment manager with substantial assets under management devoted to credit, private equity, and hedge fund strategies.  Read more 

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