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Alternative Market Briefing

Fortress Q109 earnings call - $287m loss, $2bln mandate on the horizon and revelations about hedge fund industry trends

Thursday, May 07, 2009

From Kirsten Bischoff, Opalesque New York:

New York-based firm Fortress Investment Group held their first quarter 2009 earnings calls on Wednesday morning. Reporting a $287million quarterly loss, it is clear the effects of redemptions and poor performance are still evident for many in the hedge fund industry. However, the firm announced that it was on the cusp of bringing in a $2bln mandate (the investors have yet to finalize the deal) and during market hours after publication of the earnings report shares enjoyed a temporary bump up to $8.3 finally closing (down slightly from the morning open) at $6.3 and up significantly from the low of $0.77 in late 2008.

Hedge funds and highwater Many hedge funds are facing a steep climb back to highwater marks and the ability to collect performance fees, and Fortress is no exception. The firm’s macro fund still has a 16%-17% climb and the special opportunities fund has approximately 25% to make up. However, the team noted that performance for the macro fund fund was up approximately 5% in 1Q09 and in 2Q09 thus far performance stands at approximately an additional 1%, and expectations are for additional inflows if performance remains on pace.

Investor driven trends There are many investor driven trends within the hedge fund industry that are taking shape right now which were echoed throughout the call. Management noted that investors are looking ......................

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