Cash in on Fortress' Investment Prowess

Editor's note: This column was submitted by Stockpickr member Arnab Dasgupta.

Private equity investment opportunities continue to be restricted to high-net-worth individuals, leaving an average Joe to turn green with envy at earning returns higher than those of the broad market.

This situation led me to search in earnest for publicly traded stocks that are backed by the same astute private-equity sponsors.

I might as well state why I am not recommending investing directly in Blackstone Group(BX Quote) or Fortress Investment Group(FIG Quote). Both have suffered double-digit losses since their initial public offerings, and I fear that daily headlines of tightening credit will make matters worse. Also, their accounting treatment of booking future cash flows has raised some eyebrows, and the Street is still awaiting a verdict on its legitimacy.

Luckily, I looked first at Fortress' investment foray, because I found four public companies (two of which only trade on foreign exchanges) that all pay high dividends, a safe haven in this volatile market. Of note is that Fortress has not sold a single share in these investments, even at the IPO stage. So it cannot be accused of selling out to public investors at what it perceives to be the top of the market, an accusation that is often leveled against private equity houses.

First up is Aircastle(AYR Quote), the most recently listed -- August 2006 -- of my picks. Aircastle is a global player in the aircraft -- commercial and cargo -- leasing industry. With a portfolio of 71 aircrafts spanning 24 countries, it is the 13th-largest aircraft lessor in the world.