BUSINESS SEGMENT RESULTS
Below is a discussion of third quarter 2012 segment results and business highlights.
(See supplemental data on pages 18-19 for more detail on Credit results)
- Drawbridge Special Opportunities Fund had a net return of 5.1% for the third quarter of 2012 and 13.1% year-to-date through September 30, 2012
- Raised nearly $250 million of third party capital in the third quarter, bringing total capital raised year-to-date to $3.7 billion through September 30, 2012
- Deployed over $720 million of capital during the quarter and distributed over $950 million of capital back to limited partners
- Completed the sale of CWCapital LLC for $234 million. CWCapital is an operating subsidiary of CW Financial Services LLC, which Fortress’s Credit and Private Equity funds acquired in September 2010
The Credit business, which includes our Credit Hedge Funds and Credit Private Equity Funds, generated pre-tax DE of $29 million in the third quarter of 2012, which is up $4 million from the second quarter. During the third quarter, the business recorded $53 million of incentive income, including $36 million from hedge funds and $17 million from private-equity style funds.
On a year-to-date basis, pre-tax DE of $80 million is down from $109 million for the comparable period in 2011. This is largely attributable to fewer realizations in our private-equity style funds, partially offset by additional incentive income from the hedge funds.
In our Credit Hedge funds, the Drawbridge Special Opportunities Fund continued its track record of positive investment performance in the third quarter. The fund had a net return of 5.1% in the quarter, bringing net returns year-to-date through September 30, 2012 to 13.1%. Net annualized inception-to-date returns in this fund increased to 10.9%. The Credit Hedge Fund segment had a total of $4.6 billion of incentive eligible NAV above performance thresholds as of September 30, 2012.