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Fortress Investment Group 2nd quarter profit rose 24 percent as market recovery boosted assets and fees

Thursday, August 05, 2010
Opalesque Industry Update - Assets under managementof $41.7 billion as of June 30, 2010

Raised $1.9 billion of new third-party capital in the second quarter, with $879 million to be added to assets under management when invested

Fund management distributable earnings and pre-tax distributable earnings (DE) of $73 million, or $0.14 per dividend paying share

GAAP net loss, excluding principals agreement compensation, of $14 million. GAAP net loss of $251 million. GAAP net loss attributable to Class A Shareholders of $92 million

Closed acquisition of Logan Circle Partners, adding $11.5 billion in traditional assets under management

Closed Fortress Japan Opportunity Domestic Fund, a real estate focused fund, at a cap of $800 million

Announced funds' acquisition of CW Financial Services, nation's second-largest commercial real estate special servicer

Subsequent Events in the Third Quarter

In July, the Fortress Credit Opportunities Funds II had its final closing and raised an additional $664 million of capital commitments, which will be added to assets under management when invested. The fund and related managed accounts closed at $2.6 billion of total commitments

Second Quarter 2010 Results
For the quarter ended June 30, 2010, our GAAP net loss was $251 million compared to a loss of $171 million for second quarter 2009. Our GAAP net loss attributable to Class A Shareholders was $92 million, or $0.57 loss per diluted share, as compared to a loss of $45 million, or $0.41 loss per diluted share, for the second quarter 2009. Excluding principals agreement compensation, second quarter GAAP net loss was $14 million, as compared to net income of $66 million for second quarter 2009.

For the second quarter, fund management distributable earnings was $73 million compared to $53 million in the second quarter of 2009.

Pre-tax DE for the second quarter was $73 million, or $0.14 per dividend paying share, versus $59 million for the second quarter of 2009, or $0.12 per dividend paying share.

"We delivered solid results in a quarter marked by extremely challenging market dynamics, with strong momentum in capital raising, stable management fees and continued recognition of incentive income," stated Daniel H. Mudd, Chief Executive Officer. "Equally important, we continued to grow and diversify our business, while capitalizing on historically attractive opportunities to deploy capital on our partners' behalf. We've been opportunistic in a market that continues to align with the core strengths of Fortress."

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