The Company’s segment revenues and distributable earnings will fluctuate materially depending upon the performance of its funds and the realization events within its private equity businesses, as well as other factors. Accordingly, the revenues and profits in any particular period should not be expected to be indicative of future results.
ASSETS UNDER MANAGEMENT
As of December 31, 2012, assets under management (“AUM”) totaled $53.4 billion, up 4% from $51.5 billion as of September 30, 2012 and up 22% from $43.7 billion as of December 31, 2011. During the fourth quarter of 2012, Fortress raised $1.4 billion of capital that was directly added to AUM, had a $1.4 billion increase in invested capital and had a $1.0 billion increase in its fund valuations. These increases to AUM were partially offset by (i) $1.4 billion of capital distributions to investors, (ii) $0.2 billion of RCA payments to Credit Hedge Fund investors and (iii) $0.2 billion of net client outflows for Logan Circle. As of December 31, 2012, the Private Equity Funds and Credit PE Funds had approximately $0.8 billion and $5.4 billion of uncalled capital, respectively, that will become assets under management if deployed/called. Uncalled capital in our Credit PE Funds includes $1.1 billion that is only available for follow-on investments, management fees and other fund expenses.
BUSINESS SEGMENT RESULTS
Below is a discussion of fourth quarter 2012 segment results and business highlights.
(See supplemental data on pages 19-20 for more detail on Credit results)
- Drawbridge Special Opportunities Fund LP had a net return of 4.2% for the fourth quarter of 2012 and 17.9% for the year ended December 31, 2012
- Raised $0.9 billion of third party capital in the fourth quarter, bringing total capital raised in full year 2012 to $4.6 billion
- Deployed $0.9 billion of capital during the quarter and distributed $0.4 billion of capital back to limited partners
- Held final close for Fortress Japan Opportunity Fund II (“FJOF II”) at its cap of ¥130 billion, or approximately $1.7 billion
The Credit business, which includes our Credit Hedge Funds and Credit Private Equity Funds, generated pre-tax DE of $46 million in the fourth quarter of 2012, which is up from $29 million in the fourth quarter of 2011. During the fourth quarter, the business recorded $65 million of incentive income, comprised of $38 million from hedge funds and $27 million from private-equity style funds.