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Section 1: 10-Q (10-Q)

Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2011

 

or

 

o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                          to                          

 

Commission File Number: 001-33294

 

Fortress Investment Group LLC

 (Exact name of registrant as specified in its charter)

 

Delaware

 

20-5837959

(State or other jurisdiction of incorporation
or organization)

 

(I.R.S. Employer Identification No.)

 

1345 Avenue of the Americas, New York, NY

 

10105

(Address of principal executive offices)

 

(Zip Code)

 

(212) 798-6100

(Registrant’s telephone number, including area code)

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x Yes No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer o

 

Accelerated filer x

 

 

 

Non-accelerated filer o

 

Smaller reporting company o

(Do not check if a smaller reporting company)

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o No x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date.

 

Class A Shares: 184,439,525 outstanding as of August 1, 2011.

Class B Shares: 305,857,751 outstanding as of August 1, 2011.

 

 

 



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

FORM 10-Q

 

INDEX

 

 

 

 

PAGE

 

 

 

 

PART I.  FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

 

 

Consolidated Balance Sheets as of June 30, 2011 (unaudited) and December 31, 2010

 

1

 

 

 

 

 

Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2011 and 2010

 

2

 

 

 

 

 

Consolidated Statement of Equity (unaudited) for the six months ended June 30, 2011

 

3

 

 

 

 

 

Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2011 and 2010

 

4

 

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

 

5

 

Note 1

Organization and Basis of Presentation

 

5

 

Note 2

Management Agreements and Fortress Funds

 

8

 

Note 3

Investments and Fair Value

 

14

 

Note 4

Debt Obligations

 

19

 

Note 5

Income Taxes and Tax Related Payments

 

20

 

Note 6

Related Party Transactions and Interests in Consolidated Subsidiaries

 

21

 

Note 7

Equity-Based and Other Compensation

 

24

 

Note 8

Earnings Per Share and Distributions

 

26

 

Note 9

Commitments and Contingencies

 

28

 

Note 10

Segment Reporting

 

29

 

Note 11

Subsequent Events

 

35

 

Note 12

Consolidating Financial Information

 

35

 

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

39

 

Overview and Understanding the Asset Management Business

 

39

 

Market Considerations

 

44

 

Results of Operations

 

47

 

 

Assets Under Management

 

48

 

 

Performance of our Funds

 

49

 

Liquidity and Capital Resources

 

61

 

Critical Accounting Policies

 

67

 

Contractual Obligations

 

73

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

74

 

 

 

 

Item 4.

Controls and Procedures

 

77

 

 

 

 

PART II.  OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

 

78

 

 

 

 

Item 1A.

Risk Factors

 

78

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

108

 

 

 

 

Item 3.

Defaults upon Senior Securities

 

108

 



Table of Contents

 

Item 4.

(Removed and Reserved)

 

108

 

 

 

 

Item 5.

Other Information

 

108

 

 

 

 

Item 6.

Exhibits

 

110

 

 

 

 

SIGNATURES

 

112

 



Table of Contents

 

As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires:

 

‘‘Management Fee Paying Assets Under Management,” or “AUM,” refers to the management fee paying assets we manage, including, as applicable, capital we have the right to call from our investors pursuant to their capital commitments to various funds. Our AUM equals the sum of:

 

(i)                                   the capital commitments or invested capital (or NAV, if lower) of our private equity funds and credit PE funds, depending on which measure management fees are being calculated upon at a given point in time, which in connection with private equity funds raised after March 2006 includes the mark-to-market value of public securities held within the funds,

 

(ii)                                the contributed capital of our publicly traded alternative investment vehicles, which we refer to as our “Castles,”

 

(iii)                             the net asset value, or “NAV,” of our hedge funds, including the Value Recovery Funds and certain advisory engagements which pay fees based on realizations (and on certain managed assets and, in some cases, a fixed fee); and

 

(iv)                            the NAV or fair value of our managed accounts, to the extent management fees are charged.

 

For each of the above, the amounts exclude assets under management for which we charge either no or nominal fees, generally related to our principal investments in funds as well as investments in funds by our principals, directors and employees.

 

Our calculation of AUM may differ from the calculations of other asset managers and, as a result, this measure may not be comparable to similar measures presented by other asset managers. Our definition of AUM is not based on any definition of assets under management contained in our operating agreement or in any of our Fortress Fund management agreements.

 

‘‘Fortress,” “we,” “us,” “our,” and the “company” refer, collectively, to Fortress Investment Group LLC and its subsidiaries, including the Fortress Operating Group and all of its subsidiaries.

 

‘‘Fortress Funds” and “our funds” refers to the private investment funds, alternative asset companies and related managed accounts that are managed by the Fortress Operating Group. The Fortress Macro Fund is our flagship liquid hedge fund and the Drawbridge Special Opportunities Fund is our flagship credit hedge fund.

 

‘‘Fortress Operating Group” refers to the combined entities, which were wholly-owned by the principals prior to January 2007, and in each of which Fortress Investment Group LLC acquired an indirect controlling interest in January 2007.

 

‘‘principals” or “Principals” refers to Peter Briger, Wesley Edens, Robert Kauffman, Randal Nardone and Michael Novogratz, collectively, who prior to the completion of our initial public offering and related transactions directly owned 100% of the Fortress Operating Group units and following completion of our initial public offering and related transactions own a majority of the Fortress Operating Group units and of the Class B shares, representing a majority of the total combined voting power of all of our outstanding Class A and Class B shares. The principals’ ownership percentage is subject to change based on, among other things, equity offerings and grants by Fortress and dispositions by the principals.

 



Table of Contents

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Some of the statements under Part II, Item 1A, “Risk Factors,” Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Part I, Item 3, “Quantitative and Qualitative Disclosures About Market Risk” and elsewhere in this Quarterly Report on Form 10-Q may contain forward-looking statements which reflect our current views with respect to, among other things, future events and financial performance. Readers can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this report are based upon the historical performance of us and our subsidiaries and on our current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from those indicated in these statements. Accordingly, you should not place undue reliance on any forward-looking statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report. We do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

 

SPECIAL NOTE REGARDING EXHIBITS

 

In reviewing the agreements included as exhibits to this Quarterly Report on Form 10-Q, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements.  The agreements contain representations and warranties by each of the parties to the applicable agreement.  These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

 

·                  should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

 

·                  have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

 

·                  may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

 

·                  were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

 

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.  Additional information about the Company may be found elsewhere in this Quarterly Report on Form 10-Q and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.

 

The Company acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this report not misleading.

 



Table of Contents

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

FORTRESS INVESTMENT GROUP LLC

 

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

 

 

 

June 30,

 

 

 

 

 

2011

 

December 31,

 

 

 

(Unaudited)

 

2010

 

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

227,894

 

$

210,632

 

Due from affiliates

 

174,686

 

303,043

 

Investments

 

1,114,367

 

1,012,883

 

Deferred tax asset

 

407,192

 

415,990

 

Other assets

 

116,682

 

134,147

 

 

 

$

2,040,821

 

$

2,076,695

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Accrued compensation and benefits

 

$

138,593

 

$

260,790

 

Due to affiliates

 

288,416

 

342,397

 

Deferred incentive income

 

254,145

 

198,363

 

Debt obligations payable

 

272,500

 

277,500

 

Other liabilities

 

64,207

 

68,230

 

 

 

1,017,861

 

1,147,280

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Class A shares, no par value, 1,000,000,000 shares authorized, 184,439,525 and 169,536,968 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively

 

 

 

Class B shares, no par value, 750,000,000 shares authorized, 305,857,751 and 300,273,852 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively

 

 

 

Paid-in capital

 

1,703,243

 

1,465,358

 

Retained earnings (accumulated deficit)

 

(1,250,573

)

(1,052,605

)

Accumulated other comprehensive income (loss)

 

(1,228

)

(1,289

)

Total Fortress shareholders’ equity

 

451,442

 

411,464

 

Principals’ and others’ interests in equity of consolidated subsidiaries

 

571,518

 

517,951

 

Total equity

 

1,022,960

 

929,415

 

 

 

$

2,040,821

 

$

2,076,695

 

 

See notes to consolidated financial statements

 

1



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(dollars in thousands)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

Revenues

 

 

 

 

 

 

 

 

 

Management fees: affiliates

 

$

116,048

 

$

112,894

 

$

234,916

 

$

219,430

 

Management fees: non-affiliates

 

14,375

 

6,284

 

28,776

 

8,885

 

Incentive income: affiliates

 

14,531

 

28,849

 

29,607

 

46,405

 

Incentive income: non-affiliates

 

7

 

233

 

985

 

5,387

 

Expense reimbursements from affiliates

 

43,645

 

40,794

 

87,987

 

63,861

 

Other revenues (affiliate portion disclosed in Note 6)

 

1,210

 

2,276

 

4,362

 

7,550

 

 

 

189,816

 

191,330

 

386,633

 

351,518

 

Expenses

 

 

 

 

 

 

 

 

 

Interest expense

 

4,640

 

3,698

 

9,300

 

7,494

 

Compensation and benefits

 

161,398

 

159,529

 

376,833

 

338,922

 

Principals agreement compensation

 

237,367

 

237,367

 

472,126

 

472,126

 

General, administrative and other

 

35,198

 

24,242

 

75,380

 

45,350

 

Depreciation and amortization

 

3,267

 

3,294

 

6,347

 

5,976

 

 

 

441,870

 

428,130

 

939,986

 

869,868

 

Other Income (Loss)

 

 

 

 

 

 

 

 

 

Gains (losses) (affiliate portion disclosed in Note 3)

 

(6,759

)

(12,957

)

(11,522

)

(12,385

)

Tax receivable agreement liability adjustment

 

 

 

(116

)

1,317

 

Earnings (losses) from equity method investees

 

18,497

 

6,150

 

90,900

 

26,031

 

 

 

11,738

 

(6,807

)

79,262

 

14,963

 

Income (Loss) Before Income Taxes

 

(240,316

)

(243,607

)

(474,091

)

(503,387

)

Income tax benefit (expense)

 

(5,786

)

(7,634

)

(27,205

)

(9,186

)

Net Income (Loss)

 

$

(246,102

)

$

(251,241

)

$

(501,296

)

$

(512,573

)

Principals’ and Others’ Interests in Income (Loss) of Consolidated Subsidiaries

 

$

(151,566

)

$

(158,857

)

$

(303,328

)

$

(336,038

)

Net Income (Loss) Attributable to Class A Shareholders

 

$

(94,536

)

$

(92,384

)

$

(197,968

)

$

(176,535

)

Dividends declared per Class A share

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Class A share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per Class A share, basic

 

$

(0.52

)

$

(0.57

)

$

(1.10

)

$

(1.14

)

Net income (loss) per Class A share, diluted

 

$

(0.56

)

$

(0.57

)

$

(1.11

)

$

(1.16

)

Weighted average number of Class A shares outstanding, basic

 

184,952,566

 

165,246,781

 

183,018,516

 

161,385,135

 

Weighted average number of Class A shares outstanding, diluted

 

490,810,317

 

165,246,781

 

490,634,345

 

465,388,269

 

 

See notes to consolidated financial statements

 

2



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

CONSOLIDATED STATEMENT OF EQUITY (Unaudited)

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(dollars in thousands)

 

 

 

Class A Shares

 

Class B Shares

 

Paid-In Capital

 

Retained
Earnings
(Accumulated
Deficit)

 

Accumulated
Other
Comprehensive
Income (Loss)

 

Total Fortress
Shareholders’
Equity

 

Principals’ and
Others’
Interests in
Equity of
Consolidated
Subsidiaries

 

Total Equity

 

Equity - December 31, 2010

 

169,536,968

 

300,273,852

 

$

1,465,358

 

$

(1,052,605

)

$

(1,289

)

$

411,464

 

$

517,951

 

$

929,415

 

Contributions from principals’ and others’ interests in equity

 

 

 

 

 

 

 

56,214

 

56,214

 

Distributions to principals’ and others’ interests in equity

 

 

 

(266

)

 

 

(266

)

(64,693

)

(64,959

)

Conversion of Class B shares to Class A shares

 

4,749,434

 

(4,749,434

)

3,878

 

 

(33

)

3,845

 

(3,845

)

 

Net deferred tax effects resulting from acquisition and exchange of Fortress Operating Group units

 

 

 

7,693

 

 

 

7,693

 

 

7,693

 

Director restricted share grant

 

143,624

 

 

384

 

 

 

384

 

658

 

1,042

 

Capital increase related to equity-based compensation, net

 

10,009,499

 

10,333,333

 

218,274

 

 

 

218,274

 

375,637

 

593,911

 

Dilution impact of Class A share issuance

 

 

 

7,922

 

 

(60

)

7,862

 

(7,862

)

 

Comprehensive income (loss) (net of tax)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

 

(197,968

)

 

(197,968

)

(303,328

)

(501,296

)

Foreign currency translation

 

 

 

 

 

(47

)

(47

)

149

 

102

 

Comprehensive income (loss) from equity method investees

 

 

 

 

 

201

 

201

 

637

 

838

 

Total comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(500,356

)

Equity - June 30, 2011

 

184,439,525

 

305,857,751

 

$

1,703,243

 

$

(1,250,573

)

$

(1,228

)

$

451,442

 

$

571,518

 

$

1,022,960

 

 

See notes to consolidated financial statements

 

3



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(dollars in thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2011

 

2010

 

Cash Flows From Operating Activities

 

 

 

 

 

Net income (loss)

 

$

(501,296

)

$

(512,573

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities

 

 

 

 

 

Depreciation and amortization

 

6,347

 

5,976

 

Other amortization and accretion

 

756

 

1,678

 

(Earnings) losses from equity method investees

 

(90,900

)

(26,031

)

Distributions of earnings from equity method investees

 

14,944

 

4,076

 

(Gains) losses

 

11,522

 

12,385

 

Deferred incentive income

 

(25,399

)

(46,677

)

Deferred tax (benefit) expense

 

15,601

 

2,440

 

Options received from affiliates

 

(7,021

)

 

Tax receivable agreement liability adjustment

 

116

 

(1,317

)

Equity-based compensation, including Principals’ Agreement

 

594,195

 

584,155

 

Allowance for doubtful accounts

 

4,958

 

(2,447

)

Other

 

 

1,005

 

Cash flows due to changes in

 

 

 

 

 

Due from affiliates

 

(14,601

)

(67,975

)

Other assets

 

25,279

 

838

 

Accrued compensation and benefits

 

(79,189

)

21,640

 

Due to affiliates

 

(11,236

)

(9,346

)

Deferred incentive income

 

78,537

 

131,546

 

Other liabilities

 

(8,122

)

(1,397

)

Net cash provided by (used in) operating activities

 

14,491

 

97,976

 

Cash Flows From Investing Activities

 

 

 

 

 

Contributions to equity method investees

 

(57,776

)

(31,694

)

Distributions of capital from equity method investees

 

168,381

 

46,124

 

Purchase of fixed assets

 

(7,797

)

(1,522

)

Acquisitions, net of cash received

 

 

(13,474

)

Net cash provided by (used in) investing activities

 

102,808

 

(566

)

Cash Flows From Financing Activities

 

 

 

 

 

Repayments of debt obligations

 

(5,000

)

(41,925

)

Principals’ and others’ interests in equity of consolidated subsidiaries - contributions

 

12,856

 

56

 

Principals’ and others’ interests in equity of consolidated subsidiaries - distributions

 

(107,893

)

(85,113

)

Net cash provided by (used in) financing activities

 

(100,037

)

(126,982

)

Net Increase (Decrease) in Cash and Cash Equivalents

 

17,262

 

(29,572

)

Cash and Cash Equivalents, Beginning of Period

 

210,632

 

197,099

 

Cash and Cash Equivalents, End of Period

 

$

227,894

 

$

167,527

 

Supplemental Disclosure of Cash Flow Information

 

 

 

 

 

Cash paid during the period for interest

 

$

8,025

 

$

6,583

 

Cash paid during the period for income taxes

 

$

6,657

 

$

6,006

 

Supplemental Schedule of Non-cash Investing and Financing Activities

 

 

 

 

 

Employee compensation invested directly in subsidiaries

 

$

43,007

 

$

64,021

 

Investments of receivable amounts into Fortress Funds

 

$

143,397

 

$

8,092

 

Dividends, dividend equivalents and Fortress Operating Group unit distributions declared but not yet paid

 

$

 

$

4,337

 

Distributions declared but not yet paid on other non-controlling interests

 

$

 

$

23,614

 

Contingent consideration in purchase of Logan Circle Partners L.P.

 

$

 

$

4,000

 

 

See notes to consolidated financial statements

 

4



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JUNE 30, 2011

(dollars in tables in thousands, except share data)

 

1. ORGANIZATION AND BASIS OF PRESENTATION

 

Fortress Investment Group LLC (the “Registrant,” or, together with its subsidiaries, “Fortress”) is a leading, highly diversified global investment management firm whose predecessor was founded in 1998. Its primary business is to sponsor the formation of, and provide investment management services for, various investment funds and companies, including related managed accounts (collectively, the “Fortress Funds”). Fortress generally makes principal investments in these funds.

 

Fortress has three primary sources of income from the Fortress Funds: management fees, incentive income, and investment income on its principal investments in the funds. The Fortress Funds fall into the following business segments in which Fortress operates:

 

1)              Private equity:

a)              Private equity funds, which make significant, control-oriented investments in debt and equity securities of public or privately held entities in North America and Western Europe, with a focus on acquiring and building asset-based businesses with significant cash flows; and

b)             Publicly traded alternative investment vehicles, which Fortress refers to as “Castles,” which are companies that invest primarily in real estate and real estate related debt investments.

2)              Liquid hedge funds, which invest globally in fixed income, currency, equity and commodity markets, and related derivatives to capitalize on imbalances in the financial markets. In addition, this segment includes a fund-of-funds business, which invests in Fortress Funds, funds managed by external managers, and direct investments.

3)              Credit funds:

a)              Credit hedge funds, which make highly diversified investments globally in assets, opportunistic lending situations and securities throughout the capital structure, with a value orientation, as well as non-Fortress originated funds for which Fortress has been retained as manager as part of an advisory business; and

b)             Credit private equity (“PE”) funds which are comprised of a family of “credit opportunities” funds focused on investing in distressed and undervalued assets, a family of ‘‘long dated value’’ funds focused on investing in undervalued assets with limited current cash flows and long investment horizons, a family of “real assets” funds focused on investing in tangible and intangible assets in four principal categories (real estate, capital assets, natural resources and intellectual property), and two Asia funds, a Japan real estate fund and an Asian investor based global opportunities fund.

4)              Principal investments in the above described funds.

 

Financial Statement Guide

 

Selected Financial Statement
Captions

 

Note Reference

 

Explanation

 

 

 

 

 

Balance Sheet

 

 

 

 

 

 

 

 

 

Due from Affiliates

 

6

 

Generally, management fees, expense reimbursements and incentive income due from Fortress Funds.

 

 

 

 

 

Investments

 

3

 

Primarily the carrying value of Fortress’s principal investments in the Fortress Funds.

 

 

 

 

 

Deferred Tax Asset

 

5

 

Relates to potential future tax benefits.

 

 

 

 

 

Due to Affiliates

 

6

 

Generally, amounts due to the Principals related to their interests in Fortress Operating Group and the tax receivable agreement.

 

 

 

 

 

Deferred Incentive Income

 

2

 

Incentive income already received from certain Fortress Funds based on past performance, which is subject to contingent repayment based on future performance.

 

5



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JUNE 30, 2011

(dollars in tables in thousands, except share data)

 

Selected Financial Statement
Captions

 

Note Reference

 

Explanation

 

 

 

 

 

Debt Obligations Payable

 

4

 

The balance outstanding on the credit agreement.

 

 

 

 

 

Principals’ and Others’ Interests in Equity of Consolidated Subsidiaries

 

6

 

The GAAP basis of the Principals’ and one senior employee’s ownership interests in Fortress Operating Group as well as employees’ ownership interests in certain subsidiaries.

 

 

 

 

 

Statement of Operations

 

 

 

 

 

 

 

 

 

Management Fees: Affiliates

 

2

 

Fees earned for managing Fortress Funds, generally determined based on the size of such funds.

 

 

 

 

 

Management Fees: Non-Affiliates

 

2

 

Fees earned from managed accounts and our traditional fixed income asset management business, generally determined based on the amount managed.

 

 

 

 

 

Incentive Income: Affiliates

 

2

 

Income earned from Fortress Funds, based on the performance of such funds.

 

 

 

 

 

Incentive Income: Non- Affiliates

 

2

 

Income earned from managed accounts, based on the performance of such accounts.

 

 

 

 

 

Compensation and Benefits

 

7

 

Includes equity-based, profit-sharing and other compensation to employees.

 

 

 

 

 

Principals Agreement Compensation

 

N/A

 

As a result of the principals agreement, the January 2007 value of a significant portion of the Principals’ equity in Fortress is being recorded as an expense over a five year period. Fortress is not a party to this agreement. It is an agreement between the Principals to further incentivize them to remain with Fortress. This GAAP expense has no economic effect on Fortress or its shareholders.

 

 

 

 

 

Gains (Losses)

 

3

 

The result of asset dispositions or changes in the fair value of investments or other financial instruments which are marked to market (including the Castles and GAGFAH).

 

 

 

 

 

Tax Receivable Agreement Liability Adjustment

 

5

 

Represents a change in the amount due to the Principals under the tax receivable agreement.

 

 

 

 

 

Earnings (Losses) from Equity Method Investees

 

3

 

Fortress’s share of the net earnings (losses) of the Fortress Funds resulting from its principal investments.

 

 

 

 

 

Income Tax Benefit (Expense)

 

5

 

The net tax result related to the current period. Certain of Fortress’s revenues are not subject to taxes because they do not flow through taxable entities. Furthermore, Fortress has significant permanent differences between its GAAP and tax basis earnings.

 

6



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JUNE 30, 2011

(dollars in tables in thousands, except share data)

 

Selected Financial Statement
Captions

 

Note Reference

 

Explanation

 

 

 

 

 

Principals’ and Others’ Interests in (Income) Loss of Consolidated Subsidiaries

 

6

 

Primarily the Principals’ and employees’ share of Fortress’s earnings based on their ownership interests in subsidiaries, including Fortress Operating Group.

 

 

 

 

 

Earnings Per Share

 

8

 

GAAP earnings per Class A share based on Fortress’s capital structure, which is comprised of outstanding and unvested equity interests, including interests which participate in Fortress’s earnings, at both the Fortress and subsidiary levels.

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Distributions

 

8

 

A summary of dividends and distributions, and the related outstanding shares and units, is provided.

 

 

 

 

 

Distributable Earnings

 

10

 

A presentation of our financial performance by segment (fund type) is provided, on the basis of the operating performance measure used by Fortress’s management committee.

 

In May 2011, the FASB issued new guidance regarding the measurement and disclosure of fair value, which will become effective for Fortress on January 1, 2012. Fortress does not expect this guidance to have a material direct impact on its financial position, results of operations or liquidity. Fortress has not yet completed its assessment of the potential impact of this guidance on the fair values reported by its funds.

 

The FASB has recently issued or discussed a number of proposed standards on such topics as consolidation, the definition of an investment company, financial statement presentation, revenue recognition, leases, financial instruments, hedging, and contingencies. Some of the proposed changes are significant and could have a material impact on Fortress’s reporting. Fortress has not yet fully evaluated the potential impact of these proposals, but will make such an evaluation as the standards are finalized.

 

The accompanying consolidated financial statements and related notes of Fortress have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared under U.S. generally accepted accounting principles have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of Fortress’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These financial statements should be read in conjunction with Fortress’s consolidated and combined financial statements for the year ended December 31, 2010 and notes thereto included in Fortress’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2011.  Capitalized terms used herein, and not otherwise defined, are defined in Fortress’s consolidated financial statements for the year ended December 31, 2010.

 

Certain prior period amounts have been reclassified to conform to the current period’s presentation.

 

7



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JUNE 30, 2011

(dollars in tables in thousands, except share data)

 

2. MANAGEMENT AGREEMENTS AND FORTRESS FUNDS

 

Fortress has two principal sources of income from its agreements with the Fortress Funds: contractual management fees, which are generally based on a percentage of fee paying assets under management, and related incentive income, which is generally based on a percentage of profits subject to the achievement of performance criteria. Substantially all of Fortress’s net assets, after deducting the portion attributable to principals’ and others’ interests, are a result of principal investments in, or receivables from, these funds. The terms of agreements between Fortress and the Fortress Funds are generally determined in connection with third party fund investors.

 

The Fortress Funds are divided into segments and Fortress’s agreements with each are detailed below.

 

Management Fees, Incentive Income and Related Profit Sharing Expense

 

Fortress recognized management fees and incentive income as follows:

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

Private Equity

 

 

 

 

 

 

 

 

 

Private Equity Funds

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

$

35,821

 

$

33,507

 

$

71,110

 

$

66,972

 

Incentive income - affil.

 

248

 

27,426

 

3,466

 

27,426

 

 

 

 

 

 

 

 

 

 

 

Castles

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

12,420

 

11,074

 

24,035

 

22,854

 

Management fees, options - affil.

 

 

 

7,021

 

 

Management fees - non-affil.

 

1,278

 

490

 

1,938

 

1,374

 

Incentive income - affil.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liquid Hedge Funds

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

24,395

 

22,683

 

46,547

 

44,936

 

Management fees - non-affil.

 

4,586

 

1,668

 

9,375

 

3,004

 

Incentive income - affil.

 

60

 

116

 

2,060

 

(272

)

Incentive income - non-affil.

 

7

 

 

985

 

 

 

 

 

 

 

 

 

 

 

 

Credit Funds

 

 

 

 

 

 

 

 

 

Credit Hedge Funds

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

26,830

 

34,473

 

53,633

 

63,354

 

Management fees - non-affil.

 

3,514

 

431

 

7,570

 

812

 

Incentive income - affil.

 

342

 

 

2,148

 

 

Incentive income - non-affil.

 

 

233

 

 

5,387

 

 

 

 

 

 

 

 

 

 

 

Credit PE Funds

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

16,582

 

11,157

 

32,570

 

21,314

 

Management fees - non-affil.

 

33

 

 

66

 

 

Incentive income - affil.

 

13,881

 

1,307

 

21,933

 

19,251

 

Other (A)

 

 

 

 

 

 

 

 

 

Management fees - non-affil.

 

4,964

 

3,695

 

9,827

 

3,695

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

$

116,048

 

$

112,894

 

$

234,916

 

$

219,430

 

Management fees - non-affil.

 

$

14,375

 

$

6,284

 

$

28,776

 

$

8,885

 

Incentive income - affil. (B)

 

$

14,531

 

$

28,849

 

$

29,607

 

$

46,405

 

Incentive income - non-affil.

 

$

7

 

$

233

 

$

985

 

$

5,387

 

 


(A) Related to Logan Circle.

(B) See “Deferred Incentive Income” below.

 

8



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JUNE 30, 2011

(dollars in tables in thousands, except share data)

 

Deferred Incentive Income

 

Incentive income from certain Fortress Funds, primarily private equity funds and credit PE funds, is received when such funds realize profits, based on the related agreements. However, this incentive income is subject to contingent repayment by Fortress to the funds until certain overall fund performance criteria are met. Accordingly, Fortress does not recognize this incentive income as revenue until the related contingencies are resolved. Until such time, this incentive income is recorded on the balance sheet as deferred incentive income and is included as “distributed-unrecognized” deferred incentive income in the table below. Incentive income from such funds, based on their net asset value, which has not yet been received is not recorded on the balance sheet and is included as “undistributed” deferred incentive income in the table below.

 

Incentive income from certain Fortress Funds is earned based on achieving annual performance criteria. Accordingly, this incentive income is recorded as revenue at year end (in the fourth quarter of each year), is generally received subsequent to year end, and has not been recognized for these funds during the six months ended June 30, 2011 and 2010. If the amount of incentive income contingent on achieving annual performance criteria was not contingent on the results of the subsequent quarters, $49.3 million and $9.7 million of additional incentive income from affiliates would have been recognized during the six months ended June 30, 2011 and 2010, respectively. Incentive income based on achieving annual performance criteria that has not yet been recognized, if any, is not recorded on the balance sheet and is included as “undistributed” deferred incentive income in the table below.

 

During the six months ended June 30, 2011 and 2010, Fortress recognized $21.9 million and $19.3 million, respectively, of incentive income distributions from its credit PE funds which represented “tax distributions.” These tax distributions are not subject to clawback and reflect a cash amount approximately equal to the amount expected to be paid out by Fortress for taxes or tax-related distributions on the allocated income from such funds.

 

Deferred incentive income from the Fortress Funds was comprised of the following, on an inception to date basis. This does not include any amounts related to third party funds, receipts from which are reflected as Other Liabilities until all contingencies are resolved.

 

 

 

Distributed-
Gross

 

Distributed-
Recognized
(A)

 

Distributed-
Unrecognized
(B)

 

Undistributed
net of intrinsic
clawback (C)
(D)

 

Deferred incentive income as of December 31, 2010

 

$

702,709

 

$

(504,346

)

$

198,363

 

$

200,066

 

Share of income (loss) of Fortress Funds

 

 

 

 

148,195

 

Distribution of incentive income

 

81,181

 

 

81,181

 

(81,181

)

Recognition of previously deferred incentive income

 

 

(25,399

)

(25,399

)

 

Deferred incentive income as of June 30, 2011

 

$

783,890

 

$

(529,745

)

$

254,145

 

$

267,080

 

 


(A)           All related contingencies have been resolved.

(B)             Reflected on the balance sheet.

(C)             At June 30, 2011, the net undistributed incentive income is comprised of $364.6 million of gross undistributed incentive income, net of $97.5 million of intrinsic clawback (see next page). The net undistributed incentive income amount represents the amount that would be received by Fortress from the related funds if such funds were liquidated on June 30, 2011 at their net asset values.

(D)            From inception to June 30, 2011, Fortress has paid $323.0 million of compensation expense under its employee profit sharing arrangements (Note 7) in connection with distributed incentive income, of which $27.9 million has not been expensed because management has determined that it is not probable of being incurred as an expense and will be recovered from the related individuals. If the $364.6 million of gross undistributed incentive income were realized, Fortress would recognize and pay an additional $140.5 million of compensation expense.

 

9



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JUNE 30, 2011

(dollars in tables in thousands, except share data)

 

The following tables summarize information with respect to the Fortress Funds, other than the Castles, and their related incentive income thresholds as of June 30, 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

Gain to

 

 

 

 

 

Distributed

 

Gross

 

Net

 

 

 

 

 

Inception

 

Inception

 

Net

 

NAV

 

Preferred

 

Cross Incentive

 

Undistributed

 

Distributed

 

Incentive

 

Intrinsic

 

Intrinsic

 

 

 

Maturity

 

to Date

 

to Date

 

Asset Value

 

Surplus

 

Return

 

Income

 

Incentive

 

Incentive

 

Income Subject

 

Clawback

 

Clawback

 

Fund (Vintage) (A)

 

Date (B)

 

Capital Invested

 

Distributions

 

(“NAV”)

 

(Deficit) (C)

 

Threshold (D)

 

Threshold (E)

 

Income (F)

 

Income (G)

 

to Clawback (H)

 

(I)

 

(I)

 

Private Equity Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NIH (1998)

 

Indefinite

 

$

415,574

 

$

(801,926

)

$

16,057

 

$

N/A

 

$

N/A

 

$

N/A

 

$

 

$

94,513

 

$

 

$

 

$

 

Fund I (1999) (J)

 

Apr-10

 

1,027,871

 

(2,759,045

)

118,851

 

1,850,025

 

 

N/A

 

22,411

 

325,931

 

 

 

 

Fund II (2002)

 

Feb-13

 

1,974,296

 

(3,245,088

)

115,785

 

1,386,577

 

 

N/A

 

 

287,024

 

46,164

 

14,189

 

9,085

 

Fund III (2004)

 

Jan-15

 

2,762,993

 

(1,307,382

)

1,627,830

 

172,219

 

1,079,970

 

907,751

 

 

66,903

 

66,903

 

66,903

 

45,108

 

Fund III Coinvestment (2004)

 

Jan-15

 

273,648

 

(115,936

)

177,977

 

20,265

 

139,318

 

119,053

 

 

 

 

 

 

Fund IV (2006)

 

Jan-17

 

3,639,561

 

(119,445

)

3,177,039

 

(343,077

)

1,340,191

 

1,683,268

 

 

 

 

 

 

Fund IV Coinvestment (2006)

 

Jan-17

 

762,696

 

(12,651

)

656,273

 

(93,772

)

289,400

 

383,172

 

 

 

 

 

 

Fund V (2007)

 

Feb-18

 

4,103,714

 

(884

)

3,604,583

 

(498,247

)

970,983

 

1,469,230

 

 

 

 

 

 

Fund V Coinvestment (2007)

 

Feb-18

 

990,477

 

(135

)

586,067

 

(404,275

)

270,255

 

674,530

 

 

 

 

 

 

GAGACQ Fund (2004)

 

Nov-09

 

545,663

 

(595,401

)

N/A

 

N/A

 

N/A

 

N/A

 

N/A

 

51,476

 

N/A

 

N/A

 

N/A

 

FRID (2005)

 

Apr-15

 

1,220,228

 

(505,612

)

367,914

 

(346,702

)

519,494

 

866,196

 

 

16,447

 

16,447

 

16,447

 

10,041

 

FRIC (2006)

 

May-16

 

328,754

 

(17,460

)

215,058

 

(96,236

)

147,927

 

244,163

 

 

 

 

 

 

FICO (2006)

 

Jan-17

 

724,525

 

(5

)

(23,553

)

(748,073

)

306,173

 

1,054,246

 

 

 

 

 

 

FHIF (2006)

 

Jan-17

 

1,508,484

 

(63,169

)

1,948,484

 

503,169

 

556,280

 

53,111

 

 

 

 

 

 

FECI (2007)

 

Feb-18

 

982,779

 

(146

)

832,158

 

(150,475

)

341,435

 

491,910

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

22,411

 

$

842,294

 

$

129,514

 

$

97,539

 

$

64,234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit PE Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long Dated Value Fund I (2005)

 

Apr-30

 

$

267,325

 

$

(45,656

)

$

268,266

 

$

46,597

 

$

81,346

 

$

34,749

 

$

 

$

 

$

 

$

 

$

 

Long Dated Value Fund II (2005)

 

Nov-30

 

271,554

 

(99,820

)

212,077

 

40,343

 

65,946

 

25,603

 

 

412

 

 

 

 

Long Dated Value Fund III (2007)

 

Feb-32

 

340,740

 

(130,977

)

307,040

 

97,277

 

 

N/A

 

16,219

 

1,983

 

 

 

 

LDVF Patent Fund (2007)

 

Nov-27

 

41,795

 

(10,244

)

54,127

 

22,576

 

 

N/A

 

1,568

 

461

 

 

 

 

Real Assets Fund (2007)

 

Jun-17

 

355,857

 

(205,486

)

221,698

 

71,327

 

 

N/A

 

9,815

 

1,316

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

27,602

 

$

4,172

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit PE Funds in Investment Period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Opportunities Fund (2008)

 

Oct-20

 

$

4,573,738

 

$

(4,596,156

)

$

1,592,147

 

$

1,614,565

 

$

 

$

N/A

 

$

117,958

 

$

201,700

 

$

96,067

 

$

 

$

 

Credit Opportunities Fund II (2009)

 

Jul-22

 

1,275,822

 

(337,445

)

1,188,886

 

250,509

 

 

N/A

 

50,582

 

 

 

 

 

FTS SIP L.P. (2008)

 

Oct-18

 

1,024,373

 

(901,001

)

456,371

 

332,999

 

 

N/A

 

22,958

 

44,550

 

27,047

 

 

 

SIP Managed Account (2010)

 

Sep-20

 

11,000

 

(7,937

)

13,662

 

10,599

 

 

N/A

 

2,650

 

 

 

 

 

FCO MA LSS (2010)

 

Jun-24

 

118,093

 

(14,762

)

114,017

 

10,686

 

 

N/A

 

2,215

 

 

 

 

 

FCO MA II (2010)

 

Jun-22

 

224,479

 

(36,152

)

234,609

 

46,282

 

 

N/A

 

8,790

 

 

 

 

 

FCO MA Maple Leaf (2010)

 

Oct-20

 

126,478

 

(3,903

)

123,595

 

1,020

 

3,957

 

2,937

 

 

 

 

 

 

Assets Overflow Fund (2008)

 

May-18

 

90,500

 

(112,344

)

1

 

21,845

 

 

N/A

 

 

2,180

 

1,517

 

 

 

Japan Opportunity Fund (2009)

 

Jun-19

 

807,279

 

(272,372

)

692,463

 

157,556

 

 

N/A

 

22,610

 

8,100

 

 

 

 

Net Lease Fund I (2010)

 

Feb-20

 

53,958

 

(5,642

)

54,622

 

6,306

 

 

N/A

 

820

 

 

 

 

 

Global Opportunities Fund (2010)

 

Sep-20

 

74,933

 

 

73,001

 

(1,932

)

2,770

 

4,702

 

 

 

 

 

 

Life Settlements Fund (2010)

 

Dec-22

 

285,441

 

 

274,546

 

(10,895

)

10,813

 

21,708

 

 

 

 

 

 

Life Settlements Fund MA (2010)

 

Dec-22

 

23,394

 

 

22,468

 

(926

)

886

 

1,812

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

228,583

 

$

256,530

 

$

124,631

 

$

 

$

 

 

10


 


Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

JUNE 30, 2011

(dollars in tables in thousands, except share data)

 

 

 

 

 

 

 

Percentage of

 

 

 

 

 

 

 

 

 

 

 

Incentive Income

 

Undistributed

 

Year to date

 

 

 

 

 

Gain to Cross

 

Eligible NAV Above

 

Incentive

 

Incentive

 

 

 

Incentive Income

 

Incentive Income

 

Incentive Income

 

Income

 

Income

 

 

 

Eligible NAV (K)

 

Threshold (L)

 

Threshold (M)

 

(N)

 

Crystallized (O)

 

Liquid Hedge Funds

 

 

 

 

 

 

 

 

 

 

 

Macro Funds (P) (S)

 

 

 

 

 

 

 

 

 

 

 

Main fund investments

 

$

2,587,218

 

$

95,126

 

2.2

%

$

254

 

$

720

 

Sidepocket investments (Q)

 

51,060

 

28,483

 

N/A

 

664

 

 

Sidepocket investments - redeemers (R)

 

273,497

 

138,357

 

N/A

 

3,691

 

 

Managed accounts

 

694,744

 

39,829

 

0.0

%

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

Fortress Commodities Funds

 

 

 

 

 

 

 

 

 

 

 

Main fund investments

 

1,036,433

 

50,864

 

0.0

%

 

1,026

 

Managed accounts

 

150,000

 

10,817

 

0.0

%

 

889

 

 

 

 

 

 

 

 

 

 

 

 

 

Fortress Partners Funds (S)

 

 

 

 

 

 

 

 

 

 

 

Main fund investments

 

147,858

 

36,236

 

0.0

%

1

 

 

Sidepocket investments (Q)

 

94,720

 

30,214

 

N/A

 

726

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Hedge Funds

 

 

 

 

 

 

 

 

 

 

 

Special Opportunities Funds (S)

 

 

 

 

 

 

 

 

 

 

 

Main fund investments

 

$

2,954,031

 

$

 

100.0

%

$

46,002

 

$

 

Sidepocket investments (Q)

 

131,401

 

2,310

 

N/A

 

3,885

 

 

Sidepocket investments - redeemers (R)

 

213,239

 

82,360

 

N/A

 

1,585

 

 

Main fund investments (liquidating) (T)

 

1,548,128

 

161,127

 

88.2

%

37,486

 

1,847

 

Managed accounts

 

27,964

 

20,781

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Worden Funds

 

 

 

 

 

 

 

 

 

 

 

Main fund investments

 

211,612

 

 

99.8

%

3,168