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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, 2012

 

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: 220,367,578 outstanding as of October 30, 2012.

 

Class B Shares: 298,723,852 outstanding as of October 30, 2012.

 

 

 



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, 2012 (unaudited) and December 31, 2011

1

 

 

 

 

Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2012 and 2011

2

 

 

 

 

Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended September 30, 2012 and 2011

3

 

 

 

 

Consolidated Statement of Changes in Equity (unaudited) for the nine months ended September 30, 2012

4

 

 

 

 

Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2012 and 2011

5

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

6

 

Note 1

Organization and Basis of Presentation

6

 

Note 2

Management Agreements and Fortress Funds

9

 

Note 3

Investments and Fair Value

15

 

Note 4

Debt Obligations

21

 

Note 5

Income Taxes and Tax Related Payments

22

 

Note 6

Related Party Transactions and Interests in Consolidated Subsidiaries

23

 

Note 7

Equity-Based and Other Compensation

25

 

Note 8

Earnings Per Share and Distributions

28

 

Note 9

Commitments and Contingencies

31

 

Note 10

Segment Reporting

32

 

Note 11

Subsequent Events

39

 

Note 12

Consolidating Financial Information

39

 

 

 

Item 2.

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

43

 

Overview and Understanding the Asset Management Business

43

 

Market Considerations

48

 

Assets Under Management

50

 

Performance of Our Funds

52

 

Results of Operations

55

 

Liquidity and Capital Resources

70

 

Critical Accounting Policies

76

 

Contractual Obligations

83

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

84

 

 

 

Item 4.

Controls and Procedures

87

 



Table of Contents

 

PART II. OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings

87

 

 

 

Item 1A.

Risk Factors

87

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

118

 

 

 

Item 3.

Defaults upon Senior Securities

118

 

 

 

Item 4.

Mine Safety Disclosures

118

 

 

 

Item 5.

Other Information

118

 

 

 

Item 6.

Exhibits

118

 

 

 

SIGNATURES

121

 



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. Finally, our calculation of AUM differs from the manner in which our affiliates registered with the United States Securities and Exchange Commission report “Regulatory Assets Under Management” on Form ADV and Form PF in various ways.  Significantly, Regulatory Assets Under Management, unlike Management Fee Paying Assets Under Management, is not reduced by liabilities or indebtedness associated with assets under management and it includes assets under management and uncalled capital for which Fortress receives no compensation.

 

‘‘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 are in part owned directly by the principals and one senior employee, and in part owned indirectly by Fortress Investment Group LLC, and whose equity interests are comprised of Fortress Operating Group units (“FOGUs”).

 

‘‘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 (Unaudited)

(dollars in thousands)

 

 

 

September 30,

 

 

 

 

 

2012

 

December 31,

 

 

 

(Unaudited)

 

2011

 

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

253,731

 

$

333,166

 

Due from affiliates

 

289,889

 

298,689

 

Investments

 

1,199,622

 

1,079,777

 

Deferred tax asset

 

379,372

 

400,196

 

Other assets

 

102,787

 

108,858

 

 

 

$

2,225,401

 

$

2,220,686

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Accrued compensation and benefits

 

$

222,719

 

$

247,024

 

Due to affiliates

 

345,009

 

354,158

 

Deferred incentive income

 

245,957

 

238,658

 

Debt obligations payable

 

180,528

 

261,250

 

Other liabilities

 

81,193

 

57,204

 

 

 

1,075,406

 

1,158,294

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Class A shares, no par value, 1,000,000,000 shares authorized, 220,188,973 and 189,824,053 shares issued and outstanding at September 30, 2012 and December 31, 2011 respectively

 

 

 

Class B shares, no par value, 750,000,000 shares authorized, 298,723,852 and 305,857,751 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively

 

 

 

Paid-in capital

 

2,048,874

 

1,972,711

 

Retained earnings (accumulated deficit)

 

(1,508,043

)

(1,484,120

)

Accumulated other comprehensive income (loss)

 

(2,175

)

(1,160

)

Total Fortress shareholders’ equity

 

538,656

 

487,431

 

Principals’ and others’ interests in equity of consolidated subsidiaries

 

611,339

 

574,961

 

Total equity

 

1,149,995

 

1,062,392

 

 

 

$

2,225,401

 

$

2,220,686

 

 

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,

 

 

 

2012

 

2011

 

2012

 

2011

 

Revenues

 

 

 

 

 

 

 

 

 

Management fees: affiliates

 

$

112,806

 

$

118,353

 

$

336,935

 

$

353,269

 

Management fees: non-affiliates

 

10,762

 

18,865

 

32,534

 

47,641

 

Incentive income: affiliates

 

5,976

 

14,754

 

38,994

 

44,361

 

Incentive income: non-affiliates

 

788

 

266

 

1,564

 

1,251

 

Expense reimbursements from affiliates

 

49,636

 

42,350

 

138,317

 

130,337

 

Other revenues (affiliate portion disclosed in Note 6)

 

1,555

 

1,071

 

3,885

 

5,433

 

 

 

181,523

 

195,659

 

552,229

 

582,292

 

Expenses

 

 

 

 

 

 

 

 

 

Interest expense

 

3,375

 

4,583

 

11,877

 

13,883

 

Compensation and benefits

 

181,421

 

158,426

 

537,267

 

535,259

 

Principals agreement compensation (expired in 2011)

 

 

279,623

 

 

751,749

 

General, administrative and other

 

31,004

 

34,165

 

93,365

 

109,545

 

Depreciation and amortization

 

4,982

 

23,767

 

11,718

 

30,114

 

 

 

220,782

 

500,564

 

654,227

 

1,440,550

 

Other Income (Loss)

 

 

 

 

 

 

 

 

 

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

 

(2,228

)

(15,229

)

29,542

 

(26,751

)

Tax receivable agreement liability adjustment

 

 

 

(6,935

)

(116

)

Earnings (losses) from equity method investees

 

52,034

 

(64,483

)

110,417

 

26,417

 

 

 

49,806

 

(79,712

)

133,024

 

(450

)

Income (Loss) Before Income Taxes

 

10,547

 

(384,617

)

31,026

 

(858,708

)

Income tax benefit (expense)

 

(3,881

)

2,712

 

(34,251

)

(24,493

)

Net Income (Loss)

 

$

6,666

 

$

(381,905

)

$

(3,225

)

$

(883,201

)

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

 

$

5,958

 

$

(239,847

)

$

20,698

 

$

(543,175

)

Net Income (Loss) Attributable to Class A Shareholders

 

$

708

 

$

(142,058

)

$

(23,923

)

$

(340,026

)

Dividends declared per Class A share

 

$

0.05

 

$

 

$

0.15

 

$

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Class A share

 

 

 

 

 

 

 

 

 

Net income (loss) per Class A share, basic

 

$

0.00

 

$

(0.76

)

$

(0.12

)

$

(1.85

)

Net income (loss) per Class A share, diluted

 

$

(0.04

)

$

(0.83

)

$

(0.13

)

$

(1.88

)

Weighted average number of Class A shares outstanding, basic

 

220,641,776

 

190,006,987

 

212,297,285

 

185,373,605

 

Weighted average number of Class A shares outstanding, diluted

 

520,039,541

 

495,864,738

 

517,431,334

 

492,396,969

 

 

See notes to consolidated financial statements

 

2



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(dollars in thousands)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

Comprehensive income (loss) (net of tax)

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

6,666

 

$

(381,905

)

$

(3,225

)

$

(883,201

)

Foreign currency translation

 

168

 

815

 

(884

)

917

 

Comprehensive income (loss) from equity method investees

 

(1,066

)

559

 

(1,157

)

1,397

 

Total comprehensive income (loss)

 

$

5,768

 

$

(380,531

)

$

(5,266

)

$

(880,887

)

Comprehensive income (loss) attributable to principals’ and others’ interests

 

$

5,331

 

$

(239,149

)

$

19,462

 

$

(541,691

)

Comprehensive income (loss) attributable to Class A shareholders

 

$

437

 

$

(141,382

)

$

(24,728

)

$

(339,196

)

 

3



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(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, 2011

 

189,824,053

 

305,857,751

 

$

1,972,711

 

$

(1,484,120

)

$

(1,160

)

$

487,431

 

$

574,961

 

$

1,062,392

 

Contributions from principals’ and others’ interests in equity

 

 

 

 

 

 

 

24,177

 

24,177

 

Distributions to principals’ and others’ interests in equity

 

 

 

(189

)

 

 

(189

)

(60,159

)

(60,348

)

Dividends declared

 

 

 

(31,359

)

 

 

(31,359

)

 

(31,359

)

Dividend equivalents accrued in connection with equity-based compensation

 

 

 

(548

)

 

 

(548

)

(841

)

(1,389

)

Conversion of Class B shares to Class A shares

 

17,467,232

 

(17,467,232

)

22,362

 

 

(196

)

22,166

 

(22,166

)

 

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

 

 

 

9,653

 

 

 

9,653

 

4

 

9,657

 

Director restricted share grant

 

257,918

 

 

344

 

 

 

344

 

500

 

844

 

Capital increase related to equity-based compensation, net

 

12,639,770

 

10,333,333

 

61,604

 

 

 

61,604

 

89,683

 

151,287

 

Dilution impact of Class A share issuance

 

 

 

14,296

 

 

(14

)

14,282

 

(14,282

)

 

Comprehensive income (loss) (net of tax)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

 

(23,923

)

 

(23,923

)

20,698

 

(3,225

)

Foreign currency translation

 

 

 

 

 

(507

)

(507

)

(377

)

(884

)

Comprehensive income (loss) from equity method investees

 

 

 

 

 

(298

)

(298

)

(859

)

(1,157

)

Total comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

(24,728

)

19,462

 

(5,266

)

Equity - September 30, 2012

 

220,188,973

 

298,723,852

 

$

2,048,874

 

$

(1,508,043

)

$

(2,175

)

$

538,656

 

$

611,339

 

$

1,149,995

 

 

See notes to consolidated financial statements

 

4



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(dollars in thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2012

 

2011

 

Cash Flows From Operating Activities

 

 

 

 

 

Net income (loss)

 

$

(3,225

)

$

(883,201

)

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

 

 

 

 

 

Depreciation and amortization

 

11,718

 

30,114

 

Other amortization and accretion

 

1,467

 

1,119

 

(Earnings) losses from equity method investees

 

(110,417

)

(26,417

)

Distributions of earnings from equity method investees

 

32,621

 

19,775

 

(Gains) losses

 

(29,542

)

26,751

 

Deferred incentive income

 

(36,931

)

(40,146

)

Deferred tax (benefit) expense

 

32,107

 

2,924

 

Reversal of forfeited non-cash compensation

 

(1,705

)

 

Options received from affiliates

 

(21,524

)

(12,615

)

Tax receivable agreement liability adjustment

 

6,935

 

116

 

Equity-based compensation

 

162,372

 

930,869

 

Options in affiliates granted to employees

 

3,378

 

 

Allowance for doubtful accounts

 

485

 

5,037

 

Cash flows due to changes in

 

 

 

 

 

Due from affiliates

 

(66,183

)

(55,539

)

Other assets

 

601

 

20,780

 

Accrued compensation and benefits

 

(4,276

)

(19,835

)

Due to affiliates

 

1,404

 

(9,601

)

Deferred incentive income

 

43,382

 

99,239

 

Other liabilities

 

23,061

 

31,852

 

Net cash provided by (used in) operating activities

 

45,728

 

121,222

 

Cash Flows From Investing Activities

 

 

 

 

 

Contributions to equity method investees

 

(52,573

)

(69,923

)

Distributions of capital from equity method investees

 

137,015

 

179,258

 

Purchase of fixed assets

 

(7,367

)

(13,350

)

Net cash provided by (used in) investing activities

 

77,075

 

95,985

 

Cash Flows From Financing Activities

 

 

 

 

 

Repayments of debt obligations

 

(80,722

)

(7,500

)

Repurchase of RSUs (Note 8)

 

(7,522

)

 

Dividend and dividend equivalents paid

 

(32,803

)

 

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

 

429

 

13,074

 

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

 

(81,620

)

(119,675

)

Net cash provided by (used in) financing activities

 

(202,238

)

(114,101

)

Net Increase (Decrease) in Cash and Cash Equivalents

 

(79,435

)

103,106

 

Cash and Cash Equivalents, Beginning of Period

 

333,166

 

210,632

 

Cash and Cash Equivalents, End of Period

 

$

253,731

 

$

313,738

 

Supplemental Disclosure of Cash Flow Information

 

 

 

 

 

Cash paid during the period for interest

 

$

10,198

 

$

12,049

 

Cash paid during the period for income taxes

 

$

5,623

 

$

7,793

 

Supplemental Schedule of Non-cash Investing and Financing Activities

 

 

 

 

 

Employee compensation invested directly in subsidiaries

 

$

23,598

 

$

58,865

 

Investments of receivable amounts into Fortress Funds

 

$

74,636

 

$

143,800

 

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

 

$

7,876

 

$

2,805

 

 

See notes to consolidated financial statements

 

5



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

SEPTEMBER 30, 2012

(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 an endowment style fund, which invests in Fortress Funds, funds managed by external managers, and direct investments; and a fund that seeks to generate returns by executing a positively convex investment strategy.

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), a family of Asia funds, including Japan real estate funds and an Asian investor based global opportunities fund, and a family of real estate opportunities funds.

4)             Logan Circle Partners, L.P. (“Logan Circle”), which represents Fortress’s traditional, fixed income asset management business.

5)    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.

 

6



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

SEPTEMBER 30, 2012

(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, which expired in December 2011, the January 2007 value of a significant portion of the Principals’ equity in Fortress was recorded as an expense over an approximate five year period. Fortress was not a party to this agreement. It was an agreement between the Principals to further incentivize them to remain with Fortress. This GAAP expense had 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.

 

7



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

SEPTEMBER 30, 2012

(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 became effective for Fortress on January 1, 2012. This guidance did not have a material direct impact on Fortress’s financial position, results of operations or liquidity.

 

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 financial 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 financial statements for the year ended December 31, 2011 and notes thereto included in Fortress’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2012.  Capitalized terms used herein, and not otherwise defined, are defined in Fortress’s consolidated financial statements for the year ended December 31, 2011.

 

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

 

8



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

SEPTEMBER 30, 2012

(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,

 

 

 

2012

 

2011

 

2012

 

2011

 

Private Equity

 

 

 

 

 

 

 

 

 

Private Equity Funds

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

$

29,891

 

$

30,333

 

$

89,148

 

$

101,443

 

Management fees - non-affil.

 

112

 

 

283

 

 

Incentive income - affil.

 

708

 

4,440

 

1,815

 

7,906

 

 

 

 

 

 

 

 

 

 

 

Castles

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

13,744

 

12,277

 

38,427

 

36,312

 

Management fees, options - affil.

 

8,298

 

5,594

 

21,524

 

12,615

 

Management fees - non-affil.

 

359

 

1,668

 

3,563

 

3,606

 

Incentive income - affil.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liquid Hedge Funds

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

14,783

 

23,715

 

47,946

 

70,262

 

Management fees - non-affil.

 

3,395

 

4,223

 

9,592

 

13,598

 

Incentive income - affil.

 

563

 

239

 

1,436

 

2,299

 

Incentive income - non-affil.

 

188

 

 

312

 

985

 

 

 

 

 

 

 

 

 

 

 

Credit Funds

 

 

 

 

 

 

 

 

 

Credit Hedge Funds

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

24,688

 

26,914

 

76,005

 

80,548

 

Management fees - non-affil.

 

58

 

8,004

 

313

 

15,573

 

Incentive income - affil.

 

466

 

34

 

1,749

 

2,182

 

Incentive income - non-affil.

 

 

 

130

 

 

Credit PE Funds

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

21,402

 

19,520

 

63,885

 

52,089

 

Management fees - non-affil.

 

36

 

30

 

108

 

97

 

Incentive income - affil.

 

4,239

 

10,041

 

33,994

 

31,974

 

Incentive income - non-affil.

 

600

 

266

 

1,122

 

266

 

Logan Circle

 

 

 

 

 

 

 

 

 

Management fees - non-affil.

 

6,802

 

4,940

 

18,675

 

14,767

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Management fees - affil.

 

$

112,806

 

$

118,353

 

$

336,935

 

$

353,269

 

Management fees - non-affil.

 

$

10,762

 

$

18,865

 

$

32,534

 

$

47,641

 

Incentive income - affil. (A)

 

$

5,976

 

$

14,754

 

$

38,994

 

$

44,361

 

Incentive income - non-affil.

 

$

788

 

$

266

 

$

1,564

 

$

1,251

 

 


(A) See “Deferred Incentive Income” below.

 

9



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

SEPTEMBER 30, 2012

(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, 2012 and 2011. If the amount of incentive income contingent on achieving annual performance criteria was not contingent on the results of the subsequent quarters, $108.0 million and $46.1 million of additional incentive income from affiliates would have been recognized during the nine months ended September 30, 2012 and 2011, 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, 2012 and 2011, Fortress recognized $34.0 million and $32.0 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, 2011

 

$

823,097

 

$

(584,439

)

$

238,658

 

$

202,805

 

Share of income (loss) of Fortress Funds

 

N/A

 

N/A

 

N/A

 

393,152

 

Distribution of private equity incentive income

 

44,230

 

N/A

 

44,230

 

(44,230

)

Recognition of previously deferred incentive income

 

N/A

 

(36,931

)

(36,931

)

N/A

 

Deferred incentive income as of September 30, 2012

 

$

867,327

 

$

(621,370

)

$

245,957

 

$

551,727

 

 


(A)       All related contingencies have been resolved.

(B)       Reflected on the balance sheet.

(C)       At September 30, 2012, the net undistributed incentive income is comprised of $642.4 million of gross undistributed incentive income, net of $90.7 million of intrinsic clawback (see next page). The net undistributed incentive income represents the amount that would be received by Fortress from the related funds if such funds were liquidated on September 30, 2012 at their net asset values.

(D)       From inception to September 30, 2012, Fortress has paid $365.1 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 $642.4 million of gross undistributed incentive income were realized, Fortress would recognize and pay an additional $254.8 million of compensation expense.

 

10



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

SEPTEMBER 30, 2012

(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, 2012:

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

(808,344

)

$

11,418

 

N/A

 

$

 

$

N/A

 

$

 

$

94,513

 

$

 

$

 

$

 

Fund I (1999) (K)

 

Apr-10

 

1,015,943

 

(2,784,118

)

84,153

 

1,852,328

 

 

N/A

 

15,868

 

$

332,907

 

 

 

 

Fund II (2002)

 

Feb-13

 

1,974,296

 

(3,260,088

)

135,374

 

1,421,166

 

 

N/A

 

 

287,024

 

43,214

 

7,374

 

4,722

 

Fund III (2004)

 

Jan-15

 

2,762,993

 

(1,414,198

)

2,062,904

 

714,109

 

1,410,045

 

695,936

 

 

66,903

 

66,903

 

66,903

 

45,108

 

Fund III Coinvestment (2004)

 

Jan-15

 

273,648

 

(156,926

)

124,273

 

7,551

 

175,998

 

168,447

 

 

 

 

 

 

Fund IV (2006)

 

Jan-17

 

3,639,561

 

(119,598

)

3,966,340

 

446,377

 

1,832,624

 

1,386,247

 

 

 

 

 

 

Fund IV Coinvestment (2006)

 

Jan-17

 

762,696

 

(12,651

)

697,363

 

(52,682

)

394,664

 

447,346

 

 

 

 

 

 

Fund V (2007)

 

Feb-18

 

4,103,714

 

(27,579

)

3,709,087

 

(367,048

)

1,484,658

 

1,851,706

 

 

 

 

 

 

Fund V Coinvestment (2007)

 

Feb-18

 

990,477

 

(140

)

587,345

 

(402,992

)

397,992

 

800,984

 

 

 

 

 

 

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

)

494,114

 

(220,502

)

678,756

 

899,258

 

 

16,447

 

16,447

 

16,447

 

10,041

 

FRIC (2006)

 

May-16

 

328,754

 

(17,460

)

202,563

 

(108,731

)

194,596

 

303,327

 

 

 

 

 

 

FICO (2006)

 

Jan-17

 

724,525

 

(5

)

(56,897

)

(781,417

)

393,565

 

1,174,982

 

 

 

 

 

 

FHIF (2006)

 

Jan-17

 

1,528,480

 

(63,169

)

2,205,050

 

739,739

 

759,927

 

20,188

 

 

 

 

 

 

FECI (2007)

 

Feb-18

 

982,779

 

(157

)

835,441

 

(147,181

)

475,678

 

622,859

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

15,868

 

$

849,270

 

$

126,564

 

$

90,724

 

$

59,871

 

Private Equity Funds in Investment Period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WWTAI (2011)

 

Jun-24

 

$

65,310

 

$

(1,285

)

$

63,989

 

$

(36

)

$

2,146

 

$

2,182

 

$

 

$

 

$

 

$

 

$

 

 

Continued on next page.

 

11



Table of Contents

 

FORTRESS INVESTMENT GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

SEPTEMBER 30, 2012

(dollars in tables in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

Gain to Cross

 

 

 

 

 

Distributed

 

Gross

 

Net

 

 

 

 

 

Inception

 

Inception

 

Net

 

NAV

 

Preferred

 

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)

 

Credit PE Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long Dated Value Fund I (2005)

 

Apr-30

 

$

267,325

 

$

(64,822

)

$

275,779

 

$

73,276

 

$

104,345

 

$

31,069

 

$

 

$

 

$

 

$

 

$

 

Long Dated Value Fund II (2005)

 

Nov-30

 

273,147

 

(107,074

)

202,218

 

36,145

 

83,750

 

47,605

 

 

412

 

 

 

 

Long Dated Value Fund III (2007)

 

Feb-32

 

342,643

 

(137,043

)

293,512

 

87,912

 

 

N/A

 

12,432

 

3,452

 

 

 

 

LDVF Patent Fund (2007)

 

Nov-27

 

43,221

 

(9,061

)

54,776

 

20,616

 

 

N/A

 

1,372

 

461

 

 

 

 

Real Assets Fund (2007)

 

Jun-17

 

358,617

 

(243,342

)

221,100

 

105,825

 

 

N/A

 

12,898

 

3,641

 

 

 

 

Credit Opportunities Fund (2008)

 

Oct-20

 

5,396,168

 

(5,756,710

)

1,633,011

 

1,993,553

 

 

N/A

 

163,079

 

228,362

 

87,080

 

 

 

SIP Managed Account (2010)

 

Sep-20

 

11,000

 

(21,277

)

8,058

 

18,335

 

 

N/A

 

1,612

 

2,055

 

 

 

 

Assets Overflow Fund (2008)

 

May-18

 

90,500

 

(112,344

)

 

21,844

 

 

N/A

 

 

2,180

 

1,298

 

 

 

Japan Opportunity Fund (2009)

 

Jun-19

 

1,306,702

 

(835,880

)

845,004

 

374,182

 

 

N/A

 

49,490

 

22,291

 

3,345

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

240,883

 

$

262,854

 

$

91,723

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit PE Funds in Investment Period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Opportunities Fund II (2009)

 

Jul-22

 

$

2,036,507

 

$

(1,143,754

)

$

1,442,778

 

550,025

 

$

 

N/A

 

$

85,809

 

$

22,020

 

$

 

$

 

$

 

Credit Opportunities Fund III (2011)

 

Mar-24

 

466,857

 

(3,343

)

531,998

 

68,484

 

 

N/A

 

13,455

 

 

 

 

 

FCO Managed Account #1 (2008)

 

Oct-21

 

1,567,671

 

(1,302,403

)

733,396

 

468,128

 

 

N/A

 

41,601

 

51,829

 

27,571

 

 

 

FCO Managed Account #2 (2010)

 

Jun-24

 

224,504

 

(72,140

)

192,699

 

40,335

 

 

N/A

 

7,804

 

 

 

 

 

FCO Managed Account #3 (2010)

 

Jun-22

 

510,063

 

(224,548

)

419,324

 

133,809

 

 

N/A

 

21,340

 

4,062

 

 

 

 

FCO Managed Account #4 (2010)

 

Apr-22

 

373,396

 

(81,443

)

340,679

 

48,726

 

 

N/A

 

9,589

 

 

 

 

 

FCO Managed Account #5 (2012)

 

Sep-25

 

26,390

 

(40

)

26,607

 

257

 

681

 

424

 

 

 

 

 

 

FCO Managed Account #6 (2012)

 

Mar-25

 

15,834

 

(11

)

15,798

 

(25

)

434

 

459

 

 

 

 

 

 

FCO Managed Account #7 (2012)

 

Mar-27

 

57,300

 

 

57,845

 

545

 

1,418

 

873

 

 

 

 

 

 

FCO Managed Account #8 (2012)

 

Mar-24

 

45,802

 

 

45,375

 

(427

)

499

 

926

 

 

 

 

 

 

Japan Opportunity Fund II (Yen) (2011)

 

Dec-21

 

320,393

 

(44,045

)

282,088

 

5,740

 

8,207

 

2,467

 

 

 

 

 

 

Japan Opportunity Fund II (Dollar) (2011)

 

Dec-21

 

178,643

 

(23,702

)

156,709

 

1,768

 

5,022

 

3,254

 

 

 

 

 

 

Net Lease Fund I (2010)

 

Feb-20

 

126,166

 

(20,777

)

136,285

 

30,896

 

 

N/A

 

3,935

 

98

 

98

 

 

 

Global Opportunities Fund (2010)

 

Sep-20

 

223,338

 

(57,850

)

189,431

 

23,943

 

 

N/A

 

4,685