Private Equity:

  • Fund portfolio investment valuations increased 5.4% in the second quarter of 2012, bringing year-to-date appreciation to 10.5%
  • Raised $267 million of permanent equity capital in the second quarter for Newcastle Investment Corp.; subsequent to quarter end raised an additional $167 million, bringing total equity raised since the beginning of 2011 to over $645 million
  • Announced an agreement to sell the commercial real estate lending and primary servicing businesses of CW Financial Services to Walker & Dunlop (NYSE: WD), for approximately $80 million in cash and $140 million in stock. Pending the transaction’s close, Fortress’s Private Equity and Credit funds will become Walker & Dunlop’s largest shareholder
  • Subsequent to quarter end, launched a new Private Equity fund focused on investments in mortgage servicing rights, which is expected to close in August with over $500 million in total commitments
  • Subsequent to quarter end, entered into agreement to sell RailAmerica to Genesee & Wyoming (NYSE: GWR) for an all cash purchase price of $27.50 per share

(See supplemental data on page 17 for more detail on Private Equity results)

The Private Equity business, which includes Private Equity Funds and Castles, had pre-tax DE of $27 million for the second quarter, a slight decrease from $29 million in the first quarter. Year-to-date pre-tax DE for the segment was $56 million, down $6 million from the same time period in 2011, largely due to lower Private Equity Fund management fees that resulted from changes in the basis on which these fees are calculated in three funds, partially offset by higher Private Equity Fund incentive income. The majority of this incentive income was attributable to a $6 million reversal of previously recognized claw-back reserves recorded for Fund II.

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