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Fortress Reports Fourth Quarter & Year End 2012 Results

Stocks in this article: FIG

Fortress Investment Group LLC (NYSE: FIG) today reported its fourth quarter and year end 2012 financial results.


  • Announced 20% increase in base quarterly dividend to $0.06 per dividend paying share, effective for the fourth quarter of 2012 and full year 2013
  • Repurchased 51.3 million dividend paying shares at a price of $3.50 per share, representing approximately 10% of dividend-paying shares outstanding
  • Assets under management (“AUM”) of $53.4 billion as of December 31, 2012, an increase of 4% from the third quarter of 2012 and 22% from the fourth quarter of 2011
  • GAAP net income of $222 million and $219 million for the fourth quarter and year ended December 31, 2012, respectively; GAAP book value per share of $2.60 as of December 31, 2012
  • Pre-tax distributable earnings (“DE”) of $107 million and $278 million for the fourth quarter and year ended December 31, 2012, respectively, compared to pre-tax DE of $50 million and $242 million for the fourth quarter and year ended December 31, 2011, respectively
  • Pre-tax DE per dividend paying share of $0.20 and $0.52 for the fourth quarter and year ended December 31, 2012, respectively, compared to pre-tax DE per dividend paying share of $0.09 and $0.46 for the fourth quarter and year ended December 31, 2011, respectively
  • Net cash and investments of $2.48 per dividend paying share as of December 31, 2012, up from $2.17 per dividend paying share as of December 31, 2011
  • $649 million of embedded unrecognized incentive income across our funds and options in our permanent capital vehicles as of December 31, 2012
  • Uncalled capital, or “dry powder,” of $6.2 billion as of December 31, 2012, including approximately $5.0 billion in newer vintage funds available for general investment purposes
  • Subsequent to year end, entered into a new $150 million revolving credit facility maturing in February 2016


  • Raised $1.5 billion of capital across alternatives businesses in the fourth quarter, bringing total alternative capital raised in 2012 to $6.7 billion
  • Recorded $0.2 billion of net client outflows for Logan Circle in the fourth quarter, bringing total net client inflows in 2012 to $5.7 billion
  • Delivered strong investment performance across all businesses:
    • Net fourth quarter 2012 returns of 4.2% in the Drawbridge Special Opportunities Fund LP, 6.0% in the Fortress Macro Funds and 9.5% in the Fortress Asia Macro Funds; net full year 2012 returns of 17.9%, 17.8% and 21.2%, respectively
    • Private Equity fund valuations increased 3.9% during the quarter, and 25.4% in 2012
    • Net annualized inception-to-date IRRs through year end for the Credit Opportunities Fund and Credit Opportunities Fund II of 26.9% and 18.5%, respectively
    • 13 of 15 Logan Circle strategies outperformed respective benchmarks in the fourth quarter and 14 of 15 strategies outperformed respective benchmarks in 2012
  • Subsequent to year end, raised $764 million of permanent equity capital for Newcastle Investment Corp.

“We set and achieved aggressive objectives for 2012, and broad-based momentum built into the close of the year and carried into 2013,” said Randal Nardone, interim Chief Executive Officer. “Our fourth quarter distributable earnings were the highest we have recorded in two years, and we believe only begin to reflect the potential of our company. Investment performance, the most important driver of our success, was outstanding across all of our businesses in 2012, and early 2013 returns in our main Liquid Markets funds have built further on 2012 results. Our strong performance has contributed to robust capital raising, with commitments from new and existing investors totaling $6.7 billion for 2012, and over $1.6 billion in the first two months of 2013. We are pleased with our performance to date and optimistic about our prospects looking ahead.”

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