(See supplemental data on pages 18-19 for more detail on Credit results)
- Drawbridge Special Opportunities Fund net return of 3.3% for the second quarter of 2012 and 7.6% year-to-date through June 30, 2012
- Successful close of Fortress Credit Opportunities Fund III and related managed accounts, with $4.3 billion in total commitments
- Raised over $650 million of third party capital in the second quarter, bringing total capital raised year-to-date to $3.4 billion through June 30, 2012.
- Called approximately $350 million of dry powder capital for investments during the quarter and distributed over $800 million of capital back to limited partners
- Fortress was named “Credit-Focused Hedge Fund of the Year” for a second consecutive year by Institutional Investor
The Credit business, which includes our Credit Hedge Funds and Credit Private Equity Funds, generated pre-tax DE of $25 million in the second quarter of 2012, which is roughly flat compared to the first quarter. During the quarter, the business recorded $40 million of incentive income, of which $26 million was from the hedge funds and $14 million from the private-equity style funds. The private equity-style incentive income was primarily driven by tax-related distributions in the Credit Opportunities Fund II.
On a year-to-date basis, pre-tax DE of $51 million is down from $86 million compared to the same time period last year. This is largely attributable to fewer realizations in the private-equity style funds.
In our Credit Hedge funds, the Drawbridge Special Opportunities Fund continued to build on its outstanding track record of investment performance, with strong returns in the second quarter. The fund had a net return of 3.3% in the quarter, bringing returns year-to-date through June to 7.6%. Net annualized inception-to-date returns in the fund were 10.7% as of June 30, 2012. Notably, the Credit Hedge Fund segment had $4.6 billion of incentive eligible NAV above performance thresholds as of June 30, 2012.