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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 September 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

 

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

or organization)

 

 

 

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: 189,706,571 outstanding as of November 3, 2011.

 

Class B Shares: 305,857,751 outstanding as of November 3, 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 September 30, 2011 (unaudited) and December 31, 2010

1

 

 

 

 

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

2

 

 

 

 

Consolidated Statement of Equity (unaudited) for the nine months ended September 30, 2011

3

 

 

 

 

Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 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

29

 

 

Note 10

Segment Reporting

30

 

 

Note 11

Subsequent Events

36

 

 

Note 12

Consolidating Financial Information

36

 

 

 

 

 

Item 2.

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

40

 

 

Overview and Understanding the Asset Management Business

40

 

 

Market Considerations

45

 

 

Results of Operations

48

 

 

 

Assets Under Management

49

 

 

 

Performance of our Funds

50

 

 

Liquidity and Capital Resources

63

 

 

Critical Accounting Policies

69

 

 

Contractual Obligations

75

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

76

 

 

 

Item 4.

Controls and Procedures

79

 



Table of Contents

 

PART II. OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

80

 

 

 

Item 1A.

Risk Factors

80

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

110

 

 

 

Item 3.

Defaults upon Senior Securities

110

 

 

 

Item 4.

(Removed and Reserved)

110

 

 

 

Item 5.

Other Information

110

 

 

 

Item 6.

Exhibits

111

 

 

 

SIGNATURES

114

 


 


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)

 

 

 

September 30,

 

December 31,

 

 

 

2011

 

2010

 

 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

313,738

 

$

210,632

 

Due from affiliates

 

215,823

 

303,043

 

Investments

 

1,061,460

 

1,012,883

 

Deferred tax asset

 

421,510

 

415,990

 

Other assets

 

96,776

 

134,147

 

 

 

$

2,109,307

 

$

2,076,695

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Accrued compensation and benefits

 

$

183,305

 

$

260,790

 

Due to affiliates

 

329,927

 

342,397

 

Deferred incentive income

 

260,673

 

198,363

 

Debt obligations payable

 

270,000

 

277,500

 

Other liabilities

 

97,620

 

68,230

 

 

 

1,141,525

 

1,147,280

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Class A shares, no par value, 1,000,000,000 shares authorized, 189,706,571 and 169,536,968 shares issued and outstanding at September 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 September 30, 2011 and December 31, 2010, respectively

 

 

 

Paid-in capital

 

1,837,651

 

1,465,358

 

Retained earnings (accumulated deficit)

 

(1,392,631

)

(1,052,605

)

Accumulated other comprehensive income (loss)

 

(581

)

(1,289

)

Total Fortress shareholders’ equity

 

444,439

 

411,464

 

Principals’ and others’ interests in equity of consolidated subsidiaries

 

523,343

 

517,951

 

Total equity

 

967,782

 

929,415

 

 

 

$

2,109,307

 

$

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
September 30,

 

Nine Months Ended
September 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

Revenues

 

 

 

 

 

 

 

 

 

Management fees: affiliates

 

$

118,353

 

$

107,752

 

$

353,269

 

$

327,182

 

Management fees: non-affiliates

 

18,865

 

8,628

 

47,641

 

17,513

 

Incentive income: affiliates

 

14,754

 

7,487

 

44,361

 

53,892

 

Incentive income: non-affiliates

 

266

 

371

 

1,251

 

5,759

 

Expense reimbursements from affiliates

 

42,350

 

36,745

 

130,337

 

100,606

 

Other revenues (affiliate portion disclosed in Note 6)

 

1,071

 

1,242

 

5,433

 

8,791

 

 

 

195,659

 

162,225

 

582,292

 

513,743

 

Expenses

 

 

 

 

 

 

 

 

 

Interest expense

 

4,583

 

3,549

 

13,883

 

11,043

 

Compensation and benefits

 

158,426

 

184,107

 

535,259

 

523,029

 

Principals agreement compensation

 

279,623

 

239,975

 

751,749

 

712,101

 

General, administrative and other

 

34,165

 

26,620

 

109,545

 

71,970

 

Depreciation and amortization (including impairment - Note 2)

 

23,767

 

3,361

 

30,114

 

9,337

 

 

 

500,564

 

457,612

 

1,440,550

 

1,327,480

 

Other Income (Loss)

 

 

 

 

 

 

 

 

 

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

 

(15,229

)

2,025

 

(26,751

)

(10,360

)

Tax receivable agreement liability adjustment

 

 

 

(116

)

1,317

 

Earnings (losses) from equity method investees

 

(64,483

)

16,941

 

26,417

 

42,972

 

 

 

(79,712

)

18,966

 

(450

)

33,929

 

Income (Loss) Before Income Taxes

 

(384,617

)

(276,421

)

(858,708

)

(779,808

)

Income tax benefit (expense)

 

2,712

 

4,545

 

(24,493

)

(4,641

)

Net Income (Loss)

 

$

(381,905

)

$

(271,876

)

$

(883,201

)

$

(784,449

)

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

 

$

(239,847

)

$

(177,221

)

$

(543,175

)

$

(513,259

)

Net Income (Loss) Attributable to Class A Shareholders

 

$

(142,058

)

$

(94,655

)

$

(340,026

)

$

(271,190

)

Dividends declared per Class A share

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Class A share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per Class A share, basic

 

$

(0.76

)

$

(0.57

)

$

(1.85

)

$

(1.70

)

Net income (loss) per Class A share, diluted

 

$

(0.83

)

$

(0.62

)

$

(1.88

)

$

(1.75

)

Weighted average number of Class A shares outstanding, basic

 

190,006,987

 

168,907,106

 

185,373,605

 

163,920,012

 

Weighted average number of Class A shares outstanding, diluted

 

495,864,738

 

469,180,958

 

492,396,969

 

466,666,392

 

 

See notes to consolidated financial statements

 

2


 


Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

CONSOLIDATED STATEMENT OF EQUITY (Unaudited)

FOR THE NINE MONTHS ENDED SEPTEMBER 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

 

 

 

 

 

 

 

71,902

 

71,902

 

Distributions to principals’ and others’ interests in equity

 

 

 

(397

)

 

 

(397

)

(92,973

)

(93,370

)

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

 

 

 

9,093

 

 

 

9,093

 

 

9,093

 

Director restricted share grant

 

143,624

 

 

398

 

 

 

398

 

681

 

1,079

 

Capital increase related to equity-based compensation, net

 

15,276,545

 

10,333,333

 

346,095

 

 

 

346,095

 

584,455

 

930,550

 

Dilution impact of Class A share issuance

 

 

 

13,226

 

 

(89

)

13,137

 

(13,137

)

 

Comprehensive income (loss) (net of tax)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

 

(340,026

)

 

(340,026

)

(543,175

)

(883,201

)

Foreign currency translation

 

 

 

 

 

465

 

465

 

452

 

917

 

Comprehensive income (loss) from equity method investees

 

 

 

 

 

365

 

365

 

1,032

 

1,397

 

Total comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(880,887

)

Equity - September 30, 2011

 

189,706,571

 

305,857,751

 

$

1,837,651

 

$

(1,392,631

)

$

(581

)

$

444,439

 

$

523,343

 

$

967,782

 

 

See notes to consolidated financial statements

 

3


 


Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(dollars in thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2011

 

2010

 

Cash Flows From Operating Activities

 

 

 

 

 

Net income (loss)

 

$

(883,201

)

$

(784,449

)

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

 

 

 

 

 

Depreciation and amortization

 

30,114

 

9,337

 

Other amortization and accretion

 

1,119

 

2,423

 

(Earnings) losses from equity method investees

 

(26,417

)

(42,972

)

Distributions of earnings from equity method investees

 

19,775

 

5,630

 

(Gains) losses

 

26,751

 

10,360

 

Deferred incentive income

 

(40,146

)

(53,493

)

Deferred tax (benefit) expense

 

2,924

 

391

 

Options received from affiliates

 

(12,615

)

 

Tax receivable agreement liability adjustment

 

116

 

(1,317

)

Equity-based compensation, including Principals’ Agreement

 

930,869

 

881,200

 

Allowance for doubtful accounts

 

5,037

 

(2,303

)

Other

 

 

(46

)

Cash flows due to changes in

 

 

 

 

 

Due from affiliates

 

(55,539

)

(85,937

)

Other assets

 

20,780

 

(5,076

)

Accrued compensation and benefits

 

(19,835

)

111,229

 

Due to affiliates

 

(9,601

)

(9,009

)

Deferred incentive income

 

99,239

 

146,281

 

Other liabilities

 

31,852

 

36,200

 

Net cash provided by (used in) operating activities

 

121,222

 

218,449

 

Cash Flows From Investing Activities

 

 

 

 

 

Contributions to equity method investees

 

(69,923

)

(48,857

)

Distributions of capital from equity method investees

 

179,258

 

45,955

 

Purchase of fixed assets

 

(13,350

)

(1,574

)

Acquisitions, net of cash received

 

 

(13,474

)

Net cash provided by (used in) investing activities

 

95,985

 

(17,950

)

Cash Flows From Financing Activities

 

 

 

 

 

Repayments of debt obligations

 

(7,500

)

(41,925

)

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

 

13,074

 

653

 

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

 

(119,675

)

(122,602

)

Net cash provided by (used in) financing activities

 

(114,101

)

(163,874

)

Net Increase (Decrease) in Cash and Cash Equivalents

 

103,106

 

36,625

 

Cash and Cash Equivalents, Beginning of Period

 

210,632

 

197,099

 

Cash and Cash Equivalents, End of Period

 

$

313,738

 

$

233,724

 

Supplemental Disclosure of Cash Flow Information

 

 

 

 

 

Cash paid during the period for interest

 

$

12,049

 

$

9,228

 

Cash paid during the period for income taxes

 

$

7,793

 

$

7,833

 

Supplemental Schedule of Non-cash Investing and Financing Activities

 

 

 

 

 

Employee compensation invested directly in subsidiaries

 

$

58,865

 

$

70,124

 

Investments of receivable amounts into Fortress Funds

 

$

143,800

 

$

8,127

 

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

 

$

2,805

 

$

11,821

 

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

 

$

 

$

4,898

 

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)

SEPTEMBER 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)

SEPTEMBER 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

 

7

 

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 an approximate 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)

SEPTEMBER 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, as amended in Fortress’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 4, 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)

SEPTEMBER 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 September 30,

 

Nine Months Ended September 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

Private Equity

 

 

 

 

 

 

 

 

 

Private Equity Funds

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

$

30,333

 

$

36,341

 

$

101,443

 

$

103,313

 

Incentive income - affil.

 

4,440

 

5,436

 

7,906

 

32,862

 

 

 

 

 

 

 

 

 

 

 

Castles

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

12,277

 

11,425

 

36,312

 

34,279

 

Management fees, options - affil.

 

5,594

 

 

12,615

 

 

Management fees - non-affil.

 

1,668

 

579

 

3,606

 

1,953

 

Incentive income - affil.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liquid Hedge Funds

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

23,715

 

21,615

 

70,262

 

66,602

 

Management fees - non-affil.

 

4,223

 

2,879

 

13,598

 

5,883

 

Incentive income - affil.

 

239

 

671

 

2,299

 

399

 

Incentive income - non-affil.

 

 

371

 

985

 

371

 

 

 

 

 

 

 

 

 

 

 

Credit Funds

 

 

 

 

 

 

 

 

 

Credit Hedge Funds

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

26,914

 

27,514

 

80,548

 

90,817

 

Management fees - non-affil.

 

8,004

 

262

 

15,573

 

1,074

 

Incentive income - affil.

 

34

 

 

2,182

 

 

Incentive income - non-affil.

 

 

 

 

5,388

 

 

 

 

 

 

 

 

 

 

 

Credit PE Funds

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

19,520

 

10,857

 

52,089

 

32,171

 

Management fees - non-affil.

 

30

 

 

97

 

 

Incentive income - affil.

 

10,041

 

1,380

 

31,974

 

20,631

 

Incentive income - non-affil.

 

266

 

 

266

 

 

 

 

 

 

 

 

 

 

 

 

Other (A)

 

 

 

 

 

 

 

 

 

Management fees - non-affil.

 

4,940

 

4,908

 

14,767

 

8,603

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

$

118,353

 

$

107,752

 

$

353,269

 

$

327,182

 

Management fees - non-affil.

 

$

18,865

 

$

8,628

 

$

47,641

 

$

17,513

 

Incentive income - affil. (B)

 

$

14,754

 

$

7,487

 

$

44,361

 

$

53,892

 

Incentive income - non-affil.

 

$

266

 

$

371

 

$

1,251

 

$

5,759

 

 


(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)

SEPTEMBER 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 nine months ended September 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, $46.1 million and $69.4 million of additional incentive income from affiliates would have been recognized during the nine months ended September 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 nine months ended September 30, 2011 and 2010, Fortress recognized $32.0 million and $20.6 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

 

N/A

 

N/A

 

N/A

 

119,026

 

Distribution of incentive income

 

102,456

 

N/A

 

102,456

 

(102,456

)

Recognition of previously deferred incentive income

 

N/A

 

(40,146

)

(40,146

)

N/A

 

Deferred incentive income as of September 30, 2011

 

$

805,165

 

$

(544,492

)

$

260,673

 

$

216,636

 

 


(A)     All related contingencies have been resolved.

(B)       Reflected on the balance sheet.

(C)       At September 30, 2011, the net undistributed incentive income is comprised of $317.0 million of gross undistributed incentive income, net of $100.4 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 September 30, 2011 at their net asset values.

(D)      From inception to September 30, 2011, Fortress has paid $331.7 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 $317.0 million of gross undistributed incentive income were realized, Fortress would recognize and pay an additional $121.2 million of compensation expense.

 

9


 


Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

SEPTEMBER 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 September 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 (C)

 

(“NAV”)

 

(Deficit) (D)

 

Threshold (E)

 

Threshold (F)

 

Income (G)

 

Income (H)

 

to Clawback (I)

 

(J)

 

(J)

 

Private Equity Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NIH (1998)

 

Indefinite

 

$

415,574

 

$

(801,926

)

$

16,950

 

$

N/A

 

$

N/A

 

$

N/A

 

$

 

$

94,513

 

$

 

$

 

$

 

Fund I (1999) (K)

 

Apr-10

 

1,027,871

 

(2,775,545

)

94,595

 

1,842,269

 

 

N/A

 

17,837

 

329,042

 

 

 

 

Fund II (2002)

 

Feb-13

 

1,974,296

 

(3,260,088

)

86,502

 

1,372,294

 

 

N/A

 

 

287,024

 

43,184

 

17,003

 

10,886

 

Fund III (2004)

 

Jan-15

 

2,762,993

 

(1,317,108

)

1,448,826

 

2,941

 

1,143,459

 

1,140,518

 

 

66,903

 

66,903

 

66,903

 

45,108

 

Fund III Coinvestment (2004)

 

Jan-15

 

273,648

 

(115,936

)

153,399

 

(4,313

)

146,571

 

150,884

 

 

 

 

 

 

Fund IV (2006)

 

Jan-17

 

3,639,561

 

(126,308

)

2,866,036

 

(647,217

)

1,435,615

 

2,082,832

 

 

 

 

 

 

Fund IV Coinvestment (2006)

 

Jan-17

 

762,696

 

(12,651

)

575,014

 

(175,031

)

309,766

 

484,797

 

 

 

 

 

 

Fund V (2007)

 

Feb-18

 

4,103,714

 

(7,102

)

3,459,467

 

(637,145

)

1,070,597

 

1,707,742

 

 

 

 

 

 

Fund V Coinvestment (2007)

 

Feb-18

 

990,477

 

(129

)

541,923

 

(448,425

)

295,095

 

743,520

 

 

 

 

 

 

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

)

311,018

 

(403,598

)

550,296

 

953,894

 

 

16,447

 

16,447

 

16,447

 

10,041

 

FRIC (2006)

 

May-16

 

328,754

 

(17,460

)

111,314

 

(199,980

)

157,084

 

357,064

 

 

 

 

 

 

FICO (2006)

 

Jan-17

 

724,525

 

(5

)

(53,926

)

(778,446

)

325,914

 

1,104,360

 

 

 

 

 

 

FHIF (2006)

 

Jan-17

 

1,508,484

 

(63,169

)

1,999,959

 

554,644

 

595,558

 

40,914

 

 

 

 

 

 

FECI (2007)

 

Feb-18

 

982,779

 

(146

)

841,560

 

(141,073

)

367,625

 

508,698

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

17,837

 

$

845,405

 

$

126,534

 

$

100,353

 

$

66,035

 

Private Equity Funds in Investment Period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WWTAI (2011)

 

Jun-24

 

12,600

 

 

10,471

 

(2,129

)

213

 

2,342

 

$

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit PE Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long Dated Value Fund I (2005)

 

Apr-30

 

$

267,325

 

$

(46,931

)

$

273,668

 

$

53,274

 

$

85,929

 

$

32,655

 

$

 

$

 

$

 

$

 

$

 

Long Dated Value Fund II (2005)

 

Nov-30

 

271,554

 

(100,966

)

215,525

 

44,937

 

69,430

 

24,493

 

 

412

 

 

 

 

Long Dated Value Fund III (2007)

 

Feb-32

 

340,740

 

(132,619

)

290,849

 

82,728

 

 

N/A

 

12,353

 

2,998

 

 

 

 

LDVF Patent Fund (2007)

 

Nov-27

 

38,591

 

(9,459

)

51,612

 

22,480

 

 

N/A

 

1,571

 

461

 

 

 

 

Real Assets Fund (2007)

 

Jun-17

 

358,460

 

(215,819

)

220,225

 

77,584

 

 

N/A

 

9,741

 

2,360

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

23,665

 

$

6,231

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit PE Funds in Investment Period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Opportunities Fund (2008)

 

Oct-20

 

$

4,855,787

 

$

(4,751,916

)

$

1,662,288

 

$

1,558,417

 

$

 

$

N/A

 

$

97,509

 

$

208,487

 

$

102,854

 

$

 

$

 

Credit Opportunities Fund II (2009)

 

Jul-22

 

1,532,549

 

(514,333

)

1,242,016

 

223,800

 

 

N/A

 

37,733

 

6,089

 

278

 

 

 

Credit Opportunities Fund III (2011)

 

Mar-24

 

63,090

 

 

62,192

 

(898

)

 

898

 

 

 

 

 

 

FTS SIP L.P. (2008)

 

Oct-18

 

1,173,389

 

(982,360

)

514,922

 

323,893

 

 

N/A

 

17,430

 

47,213

 

29,709

 

 

 

SIP Managed Account (2010)

 

Sep-20

 

11,000

 

(12,065

)

7,336

 

8,401

 

 

N/A

 

1,834

 

266

 

 

 

 

FCO MA LSS (2010)

 

Jun-24

 

151,157

 

(26,224

)

131,340

 

6,407

 

 

N/A

 

338

 

 

 

 

 

FCO MA II (2010)

 

Jun-22

 

345,628

 

(80,804

)

311,589

 

46,765

 

 

N/A

 

7,499

 

1,376

 

 

 

 

FCO MA Maple Leaf (2010)

 

Oct-20

 

192,152

 

(11,364

)

176,402

 

(4,386

)

7,198

 

11,584

 

 

 

 

 

 

Assets Overflow Fund (2008)

 

May-18

 

90,500

 

(112,344

)

1

 

21,845

 

 

N/A

 

 

2,180

 

1,298

 

 

 

Japan Opportunity Fund (2009)

 

Jun-19

 

1,086,540

 

(491,760

)

795,269

 

200,489

 

 

N/A

 

30,113

 

8,674

 

 

 

 

Net Lease Fund I (2010)

 

Feb-20

 

83,038

 

(6,545

)

85,696

 

9,203

 

 

N/A

 

1,195

 

 

 

 

 

Global Opportunities Fund (2010)

 

Sep-20

 

127,317

 

(14

)

119,821

 

(7,482

)

3,097

 

10,579

 

 

 

 

 

 

Life Settlements Fund (2010)

 

Dec-22

 

285,441

 

(94,254

)

168,367

 

(22,820

)

14,937

 

37,757

 

 

 

 

 

 

Life Settlements Fund MA (2010)

 

Dec-22

 

23,394

 

(7,696

)

13,778

 

(1,920

)

1,224

 

3,144

 

 

 

 

 

 

Real Estate Opportunities Fund (2011)

 

Sep-24

 

15,238

 

 

14,712

 

(526

)

 

526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

193,651

 

$

274,285

 

$

134,139

 

$

 

$

 

 

10


 


Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

SEPTEMBER 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 (L)

 

Threshold (M)

 

Threshold (N)

 

(O)

 

Crystallized (P)

 

Liquid Hedge Funds

 

 

 

 

 

 

 

 

 

 

 

Macro Funds (Q) (T)

 

 

 

 

 

 

 

 

 

 

 

Main fund investments

 

$

2,266,722

 

$

174,041

 

0.4

%

$

65

 

$

720

 

Sidepocket investments (R)

 

49,798

 

31,765

 

N/A

 

780

 

 

Sidepocket investments - redeemers (S)

 

254,909

 

154,256

 

N/A

 

3,982

 

 

Managed accounts

 

559,874

 

40,313

 

0.0

%

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia Macro Funds (T)

 

 

 

 

 

 

 

 

 

 

 

Main fund investments

 

188,434

 

8,737

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fortress Commodities Funds

 

 

 

 

 

 

 

 

 

 

 

Main fund investments

 

874,614

 

6,206

 

59.1

%

1,241

 

1,265

 

Managed accounts

 

150,000

 

2,505

 

0.0

%

 

889

 

 

 

 

 

 

 

 

 

 

 

 

 

Fortress Partners Funds (T)

 

 

 

 

 

 

 

 

 

 

 

Main fund investments

 

149,372

 

53,107

 

0.1

%

 

 

Sidepocket investments (R)

 

97,274