“We continue to deliver positive investment performance across all of our strategies which has enabled us to capture significant market share in recent quarters,” said Jude Driscoll, CEO and CIO of Logan Circle. “Strong institutional investor demand for our long-only fixed income strategies has led to record AUM of nearly $21 billion and a significant pipeline of new mandates. We are optimistic about the prospects for Logan Circle going forward as our performance track record and recent asset flow momentum has positioned the business well for long-term organic asset growth.”
The Principal Investments segment, which is comprised of Fortress’s investments in its own funds, generated pre-tax DE of $1 million for the third quarter of 2012 as compared to a pre-tax DE loss of $8 million in the third quarter of 2011. This year-over-year improvement is largely a result of the positive performance of our investments in our funds.
As of September 30 2012, Principal Investments had segment assets (excluding cash and cash equivalents) totaling $1.2 billion, up 6% from June 30, 2012. As of September 30, 2012, Fortress had a total of $154 million of outstanding commitments to its funds.
In addition, as of September 30, 2012, the net asset value of Fortress’s Principal Investments exceeded its segment cost basis by $416 million, representing net unrealized gains that have not yet been recognized for segment reporting purposes. This is up 13%, or $49 million, from June 30, 2012.
LIQUIDITY & CAPITAL
As of September 30, 2012, Fortress had cash and cash equivalents of $254 million, up from $184 million as of June 30, 2012.
In October 2012, the completed sale of private equity portfolio company RailAmerica resulted in Fortress receiving aggregate proceeds of $182 million, comprised of the payment of deferred management fees and expenses of $150 million, the repayment of advances of $16 million, and $17 million of distributions related to our principal investments in related funds. Fortress used these proceeds to pay down the remaining balance of the company’s only outstanding debt obligation – a corporate term loan that had a balance of $181 million as of September 30, 2012. Fortress currently has no outstanding term loans or revolving debt balances.