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Fortress Reports Third Quarter 2012 Results And Announces Dividend Of $0.05 Per Share

Fortress Investment Group LLC (NYSE: FIG) today reported its third quarter 2012 financial results.

FINANCIAL SUMMARY

  • Fortress declares a distribution of $0.05 per dividend paying share for the third quarter of 2012
  • Assets under management (“AUM”) increased to $51.5 billion as of September 30, 2012, an increase of 8% from the second quarter of 2012 and 18% from the third quarter of 2011; AUM does not include uncalled capital, or “dry powder,” of $7.2 billion
  • GAAP net income of $7 million in the third quarter of 2012; GAAP book value per share of $2.22 as of September 30, 2012
  • Pre-tax distributable earnings of $64 million, or $0.12 per dividend paying share, in the third quarter of 2012; pre-tax distributable earnings of $171 million, or $0.32 per dividend paying share, for the nine months ended September 30, 2012
  • Net cash and investments of $2.37 per dividend paying share as of September 30, 2012, up from $2.12 per dividend paying share as of June 30, 2012
  • $651 million of embedded incentive income across the funds as of September 30, 2012, of which $543 million has not been recognized in DE
  • Subsequent to quarter end, paid in full $181 million of outstanding corporate debt

BUSINESS HIGHLIGHTS

  • Raised $1.2 billion of capital across alternatives businesses in the third quarter, bringing total capital raised year-to-date through September 30, 2012 to $5.2 billion
  • Recorded $2.0 billion of net client flows for Logan Circle during the quarter, bringing total net client flows year-to-date through September 30, 2012 to $5.9 billion
  • Delivered strong investment performance across all businesses:
    • Net third quarter 2012 returns of 5.1% in the Drawbridge Special Opportunities Fund, 2.9% in the Fortress Macro Funds and 3.6% in the Fortress Asia Macro Funds; net year-to-date 2012 returns of 13.1% in the Drawbridge Special Opportunities Fund, 11.1% in the Fortress Macro Funds and 10.7% in the Fortress Asia Macro Funds
    • Private Equity fund valuations increased 9.4% during the quarter, and 20.8% year-to-date through September 30, 2012
    • Net annualized inception-to-date IRRs through quarter end for the Credit Opportunities Fund and Credit Opportunities Fund II of 26.9% and 17.8%, respectively
    • All 15 Logan Circle strategies outperformed respective benchmarks in the three months ended September 30, 2012 and 14 of 15 strategies outperformed respective benchmarks in the nine months ended September 30, 2012
  • Subsequent to quarter end, completed the sale of our private equity portfolio company, RailAmerica, for $1.4 billion

“We had a strong third quarter, with very solid momentum carrying forward in every one of our businesses,” said Randal Nardone, interim Chief Executive Officer. “We are solidly optimistic in our outlook. With no corporate debt, and substantial balance sheet value, we have never operated from a position of greater financial strength. New commitments of over $5 billion through the third quarter helped drive our assets under management to a record $51.5 billion. Most important, we continued to deliver strong performance for our investors in all Fortress businesses, and large-scale opportunities remain aligned with our greatest investment strengths.”

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