[May 05, 2016] |
|
Fortress Reports First Quarter 2016 Results
Fortress Investment Group LLC (NYSE:FIG) ("Fortress" or the "Company")
today reported its first quarter 2016 financial results.
FINANCIAL SUMMARY
-
Fortress declared a cash dividend of $0.20 per dividend paying share,
comprised of a first quarter 2016 base quarterly dividend of $0.09 per
dividend paying share and a special cash dividend of $0.11 per
dividend paying share
-
Announced 13% increase in base quarterly dividend to $0.09 per
dividend paying share, effective for the first quarter of 2016
-
Management Fee Paying Assets Under Management ("AUM") of $70.6 billion
as of March 31, 2016, flat compared to the previous quarter and an
increase of 1% compared to March 31, 2015
-
GAAP net loss of $16 million, or a $0.04 loss per diluted Class A
share, for the first quarter of 2016, compared to GAAP net income of
$87 million, or $0.15 per diluted Class A share, for the first quarter
of 2015
-
Pre-tax distributable earnings ("DE") of $64 million, or $0.16 per
dividend paying share, for the first quarter of 2016, compared to
pre-tax DE of $55 million, or $0.12 per dividend paying share, for the
first quarter of 2015
-
Net cash and investments of $0.9 billion, or $2.39 per dividend paying
share, as of March 31, 2016
-
$1.0 billion of gross embedded incentive income across funds and
permanent capital vehicles as of March 31, 2016, that has not yet been
recognized in DE
-
Total uncalled capital, or "dry powder," of $7.3 billion as of March
31, 2016, including $4.4 billion available for general investment
purposes
-
In March 2016, completed a modified "Dutch auction" self-tender offer
and purchased 4.8 million Class A shares at a purchase price of $4.75
per share, or an aggregate purchase price of $23 million
BUSINESS HIGHLIGHTS
-
Raised $348 million of capital across alternative investment
businesses during the quarter and $4.0 billion in the last twelve
months
-
Investment performance summary as of March 31, 2016:
-
Annualized inception-to-date net IRRs for Credit Opportunities
Fund ("FCO"), FCO II and FCO III of 23.8%, 16.4% and 9.9%,
respectively
-
First quarter 2016 net returns of 0.6% for the Drawbridge Special
Opportunities Fund ("DBSO") LP, 1.5% for the Fortress Convex Asia
Fund Ltd and 1.8% for the Fortress Centaurus Global Fund Ltd.
-
12 of 16 Logan Circle strategies outperformed respective
benchmarks in the first quarter
"We delivered solid performance for the quarter, including
year-over-year increases in AUM, revenues and distributable earnings,"
said Fortress CEO Randal Nardone. "We were pleased to announce a $0.11
special cash dividend in addition to a 13% increase in our base
quarterly dividend to $0.09 per share. With substantial embedded value
and strong levels of activity across our businesses, we are very
optimistic in our outlook for the full year."
SUMMARY FINANCIAL RESULTS
Fortress's business model is highly diversified, and management believes
that this positions the Company to capitalize on opportunities for
investing, capital formation and harvesting profits that can occur at
different points in any cycle for our individual businesses. Fortress's
business model generates stable and predictable management fees, which
is a function of the majority of Fortress's alternative AUM residing in
long-term investment structures. Fortress's alternative investment
businesses also generate variable incentive income based on performance,
and this incentive income can contribute meaningfully to financial
results. Balance sheet investments represent a third component of
Fortress's business model, and the Company has built substantial value
in these investments, which are made in Fortress funds alongside the
funds' limited partners. The table below summarizes Fortress's operating
results for the three months ended March 31, 2016. The consolidated GAAP
statement of operations and balance sheet are presented on pages 13-14
of this press release.
|
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|
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|
|
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1Q
|
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4Q
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|
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1Q
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% Change
|
|
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|
2016
|
|
|
2015
|
|
|
2015
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|
|
QoQ
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|
YoY
|
(in millions, except per share amount)
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GAAP
|
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|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
232
|
|
|
|
$
|
415
|
|
|
|
$
|
227
|
|
|
(44
|
)%
|
|
|
2
|
%
|
Expenses
|
|
|
|
207
|
|
|
|
|
242
|
|
|
|
|
329
|
|
|
(14
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)%
|
|
|
(37
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)%
|
Other Income (loss)
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|
|
|
(40
|
)
|
|
|
|
(18
|
)
|
|
|
|
208
|
|
|
N/A
|
|
|
N/A
|
Net income (loss)
|
|
|
|
(16
|
)
|
|
|
|
116
|
|
|
|
|
87
|
|
|
N/A
|
|
|
N/A
|
Net income (loss) attributable to Class A Shareholders
|
|
|
|
(9
|
)
|
|
|
|
54
|
|
|
|
|
35
|
|
|
N/A
|
|
|
N/A
|
Per diluted share
|
|
|
$
|
(0.04
|
)
|
|
|
$
|
0.20
|
|
|
|
$
|
0.15
|
|
|
N/A
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|
|
N/A
|
Weighted average Class A shares outstanding, diluted
|
|
|
|
221
|
|
|
|
|
425
|
|
|
|
|
222
|
|
|
|
|
|
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|
|
|
|
|
|
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|
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|
|
|
Distributable Earnings
|
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|
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|
|
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|
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Fund management DE
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|
$
|
63
|
|
|
|
$
|
113
|
|
|
|
$
|
51
|
|
|
(44
|
)%
|
|
|
24
|
%
|
Pre-tax DE
|
|
|
|
64
|
|
|
|
|
130
|
|
|
|
|
55
|
|
|
(51
|
)%
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|
|
16
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%
|
Per dividend paying share/unit
|
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|
$
|
0.16
|
|
|
|
$
|
0.30
|
|
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|
$
|
0.12
|
|
|
(47
|
)%
|
|
|
33
|
%
|
Weighted average dividend paying shares and units outstanding
|
|
|
|
398
|
|
|
|
|
430
|
|
|
|
|
450
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|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
|
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|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Private Equity and Permanent Capital
|
|
|
$
|
13,952
|
|
|
|
$
|
15,807
|
|
|
|
$
|
14,801
|
|
|
(12
|
)%
|
|
|
(6
|
)%
|
Credit1
|
|
|
|
18,689
|
|
|
|
|
18,107
|
|
|
|
|
13,834
|
|
|
3
|
%
|
|
|
35
|
%
|
Liquid Markets2
|
|
|
|
5,195
|
|
|
|
|
5,409
|
|
|
|
|
7,838
|
|
|
(4
|
)%
|
|
|
(34
|
)%
|
Logan Circle
|
|
|
|
32,801
|
|
|
|
|
31,178
|
|
|
|
|
33,416
|
|
|
5
|
%
|
|
|
(2
|
)%
|
Total Assets Under Management
|
|
|
$
|
70,637
|
|
|
|
$
|
70,501
|
|
|
|
$
|
69,889
|
|
|
0
|
%
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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____________________________________
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|
1 The Assets Under Management presented for Credit
includes $2,589 million of AUM related to co-managed funds as of 1Q
2016.
|
|
2 The Assets Under Management presented for Liquid
Markets includes $4,469 million of AUM related to Fortress's
affiliated manager platform ("Affiliated Managers") as of 1Q 2016.
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|
CONSOLIDATED GAAP RESULTS
Fortress recorded a GAAP net loss of $16 million, or a $0.04 loss per
diluted Class A share, for the first quarter of 2016, compared to GAAP
net income of $87 million, or $0.15 per diluted Class A share, for the
first quarter of 2015. Our diluted earnings per share for all periods
presented includes the income tax effects to net income (loss)
attributable to Class A shareholders from the assumed conversion of
Fortress Operating Group units and fully vested restricted partnership
units to Class A shares.
The year-over-year decrease in Fortress's first quarter 2016 GAAP net
income was primarily driven by a $248 million decrease in other income,
partially offset by a $122 million decrease in expenses and a $5 million
increase in revenues. The decrease in other income was primarily related
to the transfer of our interest in Graticule Asset Management
("Graticule"). In January 2015, the Fortress Asia Macro Funds and
related managed accounts transitioned to Graticule, an autonomous asset
management business on Fortress's affiliated manager platform
("Affiliated Managers"). Fortress recorded the results of this
transaction at fair value, which for the first quarter of 2015 resulted
in a non-cash gain of $134 million recorded in other income and a
non-cash expense of $101 million recorded in expenses related to the
portion of Fortress's interest that was transferred to a former senior
employee.
Excluding the effects of the Graticule transfer described above, other
income and expenses for the first quarter of 2016 declined $113 million
and $21 million, respectively, compared to the first quarter of 2015.
The $113 million decline in other income was primarily related to a net
decrease in earnings from equity method investees, primarily with
respect to our investments in our PE funds and Liquid hedge funds, net
losses in the fair value of derivatives, primarily related to Japanese
Yen foreign exchange contracts, and net decreases in the fair value of
options and common stock in our publicly traded permanent capital
vehicles and publicly traded private equity portfolio companies.
The $21 million decline in expenses was primarily related to lower
compensation and benefits expense and lower general, administrative and
other expense, partially offset by higher interest expense.
The $5 million increase in revenues was primarily related to higher
incentive income, partially offset by lower management fees and expense
reimbursements.
CONSOLIDATED SEGMENT RESULTS (NON-GAAP)
This section provides information about each of Fortress's businesses:
(i) Credit Hedge Funds and Credit PE Funds, (ii) Private Equity Funds
and Permanent Capital Vehicles, (iii) Liquid Hedge Funds, and (iv) Logan
Circle. Fortress uses DE as the primary metric to manage its businesses
and gauge the Company's performance, and it uses DE exclusively to
report segment results. All DE figures are presented on a pre-tax basis.
Consolidated segment results are non-GAAP information and are not
presented as a substitute for Fortress's GAAP results. Fortress urges
you to read "Non-GAAP Information" below.
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As of March 31, 2016
|
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|
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|
|
|
Private Equity
|
|
|
Credit Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent
|
|
|
|
|
|
|
|
|
Liquid Hedge
|
|
|
Logan Circle
|
(in millions)
|
|
|
Total
|
|
|
Funds
|
|
|
Capital Vehicles
|
|
|
Hedge Funds
|
|
|
PE Funds
|
|
|
Funds
|
|
|
Partners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management3
|
|
|
$
|
70,637
|
|
|
|
$
|
7,179
|
|
|
|
$
|
6,773
|
|
|
|
$
|
9,336
|
|
|
|
$
|
9,353
|
|
|
|
$
|
5,195
|
|
|
|
$
|
32,801
|
|
Dry Powder
|
|
|
$
|
7,286
|
|
|
|
$
|
607
|
|
|
|
$
|
-
|
|
|
|
$
|
309
|
|
|
|
$
|
6,370
|
|
|
|
|
N/A
|
|
|
|
|
N/A
|
|
Average Management Fee Rate4
|
|
|
|
|
|
|
1.2%
|
|
|
|
|
1.5%
|
|
|
|
|
2.0%
|
|
|
|
|
1.3%
|
|
|
|
|
1.1%
|
|
|
|
|
0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Eligible NAV Above Incentive Income Threshold5
|
|
|
$
|
21,133
|
|
|
|
$
|
853
|
|
|
|
$
|
4,735
|
|
|
|
$
|
4,382
|
|
|
|
$
|
11,020
|
|
|
|
$
|
143
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Undistributed Incentive Income: Unrecognized
|
|
|
$
|
1,022
|
|
|
|
$
|
22
|
|
|
|
$
|
20
|
|
|
|
$
|
61
|
|
|
|
$
|
916
|
|
|
|
$
|
3
|
|
|
|
$
|
-
|
|
Undistributed Incentive Income: Recognized
|
|
|
|
8
|
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
6
|
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
$
|
-
|
|
Undistributed Incentive Income6
|
|
|
$
|
1,030
|
|
|
|
$
|
22
|
|
|
|
$
|
21
|
|
|
|
$
|
67
|
|
|
|
$
|
916
|
|
|
|
$
|
4
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
Private Equity
|
|
|
Credit Funds
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
Permanent
|
|
|
|
|
|
|
|
|
Liquid Hedge
|
|
|
Logan Circle
|
|
|
|
Total
|
|
|
Funds
|
|
|
Capital Vehicles
|
|
|
Hedge Funds
|
|
|
PE Funds
|
|
|
Funds
|
|
|
Partners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
348
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
272
|
|
|
|
$
|
13
|
|
|
|
$
|
63
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
141
|
|
|
|
$
|
26
|
|
|
|
$
|
27
|
|
|
|
$
|
37
|
|
|
|
$
|
31
|
|
|
|
$
|
6
|
|
|
|
$
|
14
|
|
Incentive income
|
|
|
|
64
|
|
|
|
|
-
|
|
|
|
|
2
|
|
|
|
|
7
|
|
|
|
|
53
|
|
|
|
|
2
|
|
|
|
|
-
|
|
Total
|
|
|
|
205
|
|
|
|
|
26
|
|
|
|
|
29
|
|
|
|
|
44
|
|
|
|
|
84
|
|
|
|
|
8
|
|
|
|
|
14
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(109
|
)
|
|
|
|
(10
|
)
|
|
|
|
(19
|
)
|
|
|
|
(26
|
)
|
|
|
|
(32
|
)
|
|
|
|
(9
|
)
|
|
|
|
(13
|
)
|
Profit sharing compensation expenses
|
|
|
|
(31
|
)
|
|
|
|
-
|
|
|
|
|
(1
|
)
|
|
|
|
(3
|
)
|
|
|
|
(26
|
)
|
|
|
|
(1
|
)
|
|
|
|
-
|
|
Total
|
|
|
|
(140
|
)
|
|
|
|
(10
|
)
|
|
|
|
(20
|
)
|
|
|
|
(29
|
)
|
|
|
|
(58
|
)
|
|
|
|
(10
|
)
|
|
|
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Managers
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
(3
|
)
|
|
|
|
-
|
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
$
|
63
|
|
|
|
$
|
16
|
|
|
|
$
|
8
|
|
|
|
$
|
14
|
|
|
|
$
|
25
|
|
|
|
$
|
(1
|
)
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income7
|
|
|
|
1
|
|
|
|
|
(2
|
)
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
64
|
|
|
|
$
|
14
|
|
|
|
$
|
9
|
|
|
|
$
|
14
|
|
|
|
$
|
28
|
|
|
|
$
|
2
|
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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|
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|
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____________________________________
|
|
3 The Assets Under Management presented for the Credit
Hedge Funds includes $2,589 million related to co-managed funds
and $815 million related to the third party originated JP Funds
and Value Recovery Funds. The Assets Under Management presented
for the Liquid Hedge Funds includes $4,469 million related to
Affiliated Managers.
4 The Average Management Fee Rate presented for the
Credit Hedge Funds excludes the co-managed funds and third-party
originated JP Funds and Value Recovery Funds (see footnote 3
above). The Average Management Fee Rate presented for the Liquid
Hedge Funds excludes Affiliated Managers.
5 The Incentive Eligible NAV Above Incentive Income
Threshold presented for Credit Hedge Funds excludes co-managed
funds, certain third party originated funds and sidepocket
investments and for Liquid Hedge Funds, excludes Affiliated
Managers and sidepocket investments. The Incentive Eligible NAV
Above Incentive Income Threshold presented for Private Equity
Funds and Credit PE Funds (except for a certain FCO Managed
Account in its investment period and a portion of LDVF I and FCO
IV, whose capital was above the incentive income threshold as of
March 31, 2016), represents total fund NAV. The Incentive Eligible
NAV Above Incentive Income Threshold presented for the Permanent
Capital Vehicles represents the equity basis that is used to
calculate incentive income.
6 The Undistributed Incentive Income presented for the
Credit Hedge Funds excludes co-managed funds and certain third
party originated funds and for Liquid Hedge Funds, excludes
Affiliated Managers. Undistributed Incentive Income includes the
impact of sidepocket investments on Credit and Liquid Hedge Funds.
Undistributed Incentive Income for Private Equity Funds, Credit PE
Funds and Liquid and Credit Hedge Fund sidepocket and redeeming
capital account (RCA) investments has not been recognized in
Distributable Earnings and will be recognized when realized;
Undistributed Incentive Income for the main Hedge Fund investments
was recognized in Distributable Earnings when earned.
Undistributed Incentive Income for Credit PE Funds includes $7
million of incentive income that would have been recorded in
Distributable Earnings if Fortress had settled Japanese Yen
foreign exchange derivative contracts it had outstanding as of
March 31, 2016. Undistributed Incentive Income for Permanent
Capital Vehicles includes incentive income that would have been
recorded in Distributable Earnings if Fortress had (i) exercised
all of its in-the-money options it holds in the Permanent Capital
Vehicles and sold all of the resulting shares and (ii) sold all of
its Permanent Capital Vehicle common shares which it received as
incentive income, based on their March 31, 2016 closing price.
7 Net Investment Income includes Unallocated Losses of
$1 million and Unallocated Expenses of $3 million.
|
|
|
Pre-tax DE was $64 million in the first quarter of 2016, up from $55
million in the first quarter of 2015, primarily due to higher incentive
income and management fees and lower operating expenses, partially
offset by lower earnings from affiliated managers and net investment
income.
Management fees were $141 million in the first quarter of 2016, up from
$139 million in the first quarter of 2015. The increase was primarily
due to higher management fees from the Permanent Capital Vehicles,
Credit Hedge Funds, Credit PE Funds and Logan Circle, partially offset
by lower management fees from the Liquid Hedge Funds and Private Equity
Funds.
Incentive income in the first quarter of 2016 totaled $64 million, up
from $51 million in the first quarter of 2015. The year-over-year
increase was primarily due to higher incentive income from the Credit PE
Funds, partially offset by lower incentive income from the Credit Hedge
Funds.
Earnings from Affiliated Managers totaled $1 million in the first
quarter of 2016, down from $9 million in the first quarter of 2015.
Additionally, Fortress had over $1.0 billion in gross undistributed,
unrecognized incentive income based on investment valuations as of March
31, 2016. This includes $1.0 billion from our funds and $20 million from
options and common shares in our permanent capital vehicles.
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 distributable
earnings in any particular period should not be expected to be
indicative of future results.
ASSETS UNDER MANAGEMENT
As of March 31, 2016, AUM totaled $70.6 billion, up slightly from $70.5
billion as of December 31, 2015. Notably, approximately 86% of
alternative AUM was in funds with long-term investment structures as of
March 31, 2016.
During the quarter, Fortress's AUM increased due to (i) $0.7 billion of
capital acquisitions related to the third party originated JP Funds,
(ii) $0.5 billion of net market-driven valuation gains, (iii) a $0.3
billion increase in invested capital, (iv) $0.3 billion of capital
raised that was directly added to AUM and (v) $0.3 billion of net client
inflows for Logan Circle. These increases to AUM were partially offset
by (i) a $0.7 billion reduction in AUM related to Fund III and Fund III
Coinvestment passing their contractual maturity date, (ii) $0.6 billion
of capital distributions to investors, (iii) $0.3 billion of Hedge Fund
redemptions, (iv) a $0.3 billion decline in the AUM of Affiliated
Managers and co-managed funds, and (v) $0.1 billion in distributions to
investors in redeeming capital accounts.
As of March 31, 2016, the Credit Funds and Private Equity Funds had $6.7
billion and $0.6 billion of uncalled capital, respectively, that will
become AUM if called. Uncalled capital or dry powder - capital committed
to the funds but not invested and generating management fees - includes
$2.9 billion that is only available for follow-on investments,
management fees and other fund expenses.
BUSINESS SEGMENT RESULTS
Below is a discussion of first quarter 2016 segment results and business
highlights.
Credit:
-
Credit AUM up 35% year-over-year to record $18.7 billion
-
FCO, FCO II, FCO III, FJOF and FJOF II (Yen) recorded annualized
inception-to-date net IRRs of 23.8%, 16.4%, 9.9%, 34.4% and 28.2%,
respectively, through March 31, 2016
-
Recorded $60 million of gross incentive income in the quarter and
$342 million of gross incentive income over the last twelve months
-
Appointed investment manager of certain third party originated
funds (the "JP Funds")
(See supplemental data on pages 19-20 for more detail on Credit
results)
The Credit business, which includes our Credit PE Funds and Credit Hedge
Funds, generated pre-tax DE of $42 million in the first quarter of 2016,
up from $29 million in the first quarter of 2015. The year-over-year
increase in DE was primarily driven by higher incentive income and
management fees, partially offset by higher operating and profit sharing
expenses.
The Credit PE Funds generated pre-tax DE of $28 million in the quarter,
up from $7 million in the first quarter of 2015, as gross incentive
income more than doubled year-over-year to $53 million. Over the last
twelve months, the Credit PE Funds recognized $273 million of gross
incentive income, while gross unrecognized Credit PE incentive income
increased $68 million year-over-year to a record high of $916 million as
of March 31, 2016.
The Credit Hedge Funds generated pre-tax DE of $14 million for the
quarter, down from $22 million in the first quarter of 2015, primarily
due to lower incentive income. Fortress's flagship credit hedge fund,
DBSO LP, had net returns of 0.6% for the quarter and 4.3% for the last
twelve months ended March 31, 2016.
In March 2016, Fortress was appointed investment manager of the third
party originated JP Funds, as part of the Credit Hedge Fund segment. The
JP Funds focus primarily on investing in secondary LP interests and had
$735 million of AUM as of March 31, 2016. The Credit Hedge Funds also
raised $272 million of new capital in the quarter.
Private Equity and Permanent Capital Vehicles:
-
Permanent Capital Vehicle AUM up 47% year-over-year to $6.8 billion
-
Record $4.7 billion of Permanent Capital Vehicle Incentive Eligible
NAV Above Incentive Income Thresholds at quarter end
-
Substantial PE investment value remaining to harvest in funds and
on balance sheet
(See supplemental data on pages 17-18 for more detail on Private
Equity results)
The Private Equity business recorded pre-tax DE of $23 million in the
first quarter of 2016, including $14 million for the Private Equity
Funds and $9 million for the Permanent Capital Vehicles, up from $19
million in the first quarter of 2015. The year-over-year increase was
primarily driven by higher management fees for the Permanent Capital
Vehicles and lower operating expenses for the Private Equity Funds,
partially offset by lower management fees for the Private Equity Funds.
Private Equity Fund valuations declined 8% in the first quarter,
primarily due to changes in the value of OneMain Holdings, Inc. (NYSE:
OMF) and Nationstar Mortgage Holdings Inc. (NYSE: NSM), partially offset
by appreciation of certain private portfolio company investments.
At quarter end, New Residential Investment Corp. (NYSE: NRZ), New Senior
Investment Group Inc. (NYSE: SNR), New Media Investment Group Inc.
(NYSE: NEWM) and Eurocastle Investment Limited (Euronext Amsterdam: ECT)
were at or above their respective incentive income thresholds and
eligible to earn incentive income.
Liquid Hedge Funds:
-
Raised $63 million of capital in the quarter, and $310 million over
the last twelve months
-
All Fortress Liquid Hedge Funds generated positive net returns in
the first quarter
(See supplemental data on page 21 for more detail on Liquid Hedge
Funds results)
The Liquid Hedge Funds recorded pre-tax DE of $2 million in the first
quarter of 2016, down from $9 million in the first quarter of 2015,
primarily due to lower management fees and earnings from Affiliated
Managers, partially offset by lower expenses.
First quarter 2016 net returns for the Fortress Convex Asia Funds and
Fortress Centaurus Global Funds were 1.5% and 1.8%, respectively. Net
returns year-to-date through April 29, 2016 for the Fortress Convex Asia
Funds and Fortress Centaurus Global Funds were 1.4% and 2.1%,
respectively.*
The Liquid Hedge Funds had $5.2 billion of AUM at quarter end, including
$4.5 billion related to Affiliated Managers. As of March 31, 2016,
the Liquid Hedge Funds had $39 million of outstanding redemption notices
that will be paid in the second quarter of 2016.
____________________________________
|
* The net returns for the Fortress Convex Asia Funds
reflect returns for the Fortress Convex Asia Funds and Fortress
Convex Asia PF Funds collectively. The calculation of net returns
for the Fortress Convex Asia PF Funds reflect all expenses,
including management fees, accrued incentive allocation (if any),
and other expenses over the fund's Trading Level. "Trading Level"
is defined as the product of the fund's NAV multiplied by the
Funding Factor. The "Funding Factor" is 2x for Fortress Convex
Asia Fund PF Ltd and Fortress Convex Asia Fund PF LP.
|
|
Logan Circle:
-
In the first quarter, all 16 Logan Circle strategies generated
positive net returns and 12 of 16 strategies outperformed their
respective benchmarks
-
Strong investment performance drove $1.4 billion of market-driven
valuation gains in the quarter
(See supplemental data on page 22 for more detail on Logan Circle
results)
Logan Circle, our traditional asset management business, recorded
pre-tax DE of $1 million for the first quarter of 2016, up from a
pre-tax DE loss of $1 million for the first quarter of 2015.
Logan Circle ended the quarter with $32.8 billion in AUM, up 5% compared
to the previous quarter, primarily due to $1.4 billion of market-driven
valuation gains and $261 million of net client inflows.
For the quarter ended March 31, 2016, 12 of 16 Logan Circle fixed income
strategies outperformed their respective benchmarks. Since inception, 15
of 16 Logan Circle fixed income strategies have outperformed their
respective benchmarks and seven were ranked in the top quartile of
performance for their competitor universe.
LIQUIDITY & CAPITAL
As of March 31, 2016, Fortress had cash and cash equivalents of $226
million and debt obligations of $261 million.
As of March 31, 2016, Fortress had $1.0 billion of investments in
Fortress funds and options in publicly traded permanent capital vehicles
and a total of $149 million in outstanding commitments to its funds. In
addition, the NAV of Fortress's investments in its own funds exceeded
its segment cost basis by $461 million at quarter end, representing net
unrealized gains that have not yet been recognized for segment reporting
purposes.
In March 2016, Fortress completed a modified "Dutch auction" self-tender
offer and purchased 4,798,863 of its Class A shares at a purchase price
of $4.75 per share, or an aggregate purchase price of $23 million. All
of these Class A shares were canceled and cease to be outstanding.
In January 2016, Fortress entered into a new $275 million unsecured
revolving credit facility (including a $15 million letter of credit
subfacility) under which, approximately $167 million was available to be
drawn as of March 31, 2016.
DIVIDEND
Fortress's Board of Directors declared a cash dividend of $0.20 per
dividend paying share, comprised of a first quarter 2016 base quarterly
dividend of $0.09 per dividend paying share and a special cash dividend
of $0.11 per dividend paying share. The dividend is payable on May 20,
2016 to Class A shareholders of record as of the close of business on
May 17, 2016.
Fortress announced an increase in its base quarterly dividend, effective
for the first quarter of 2016, to $0.09 per dividend paying share, up
13% from $0.08 per dividend paying share.
The declaration and payment of any dividends are at the sole discretion
of the Board of Directors, which may decide to change its dividend
policy at any time. Please see below for information on the U.S. federal
income tax implications of the dividend.
NON-GAAP INFORMATION
DE is a primary metric used by management to measure Fortress's
operating performance. Consistent with GAAP, DE is the sole measure that
management uses to manage, and thus report on, Fortress's segments,
namely: Private Equity, Permanent Capital Vehicles, Credit Hedge Funds,
Credit PE Funds, Liquid Hedge Funds and Logan Circle. DE differs from
GAAP net income in a number of material ways. For a detailed description
of the calculation of pre-tax DE and fund management DE, see Exhibit 3
to this release and note 10 to the financial statements included in the
Company's most recent quarterly report on Form 10-Q.
Fortress aggregates its segment results to report consolidated segment
results, as shown in the table under "Summary Financial Results" and in
the "Total" column of the table under "Consolidated Segment Results
(Non-GAAP)." The consolidated segment results are non-GAAP financial
information. Management believes that consolidated segment results
provide a meaningful basis for comparison among present and future
periods. However, consolidated segment results should not be considered
a substitute for Fortress's consolidated GAAP results. The exhibits to
this release contain reconciliations of the components of Fortress's
consolidated segment results to the comparable GAAP measures, and
Fortress urges you to review these exhibits. Fortress also uses weighted
average dividend paying shares and units outstanding (used to calculate
pre-tax DE per dividend paying share) and net cash and investments. The
exhibits to this release contain reconciliations of these measures to
the comparable GAAP measures, and Fortress urges you to review these
exhibits.
CONFERENCE CALL
Management will host a conference call today, Thursday, May 5th
at 9:00 A.M. Eastern Time. A copy of the earnings release is posted to
the Investor Relations section of Fortress's website, www.fortress.com.
The conference call may be accessed by dialing 1-877-694-6694 (from
within the U.S.) or 1-970-315-0985 (from outside of the U.S.) ten
minutes prior to the scheduled start of the call; please reference
"Fortress First Quarter Earnings Call." A simultaneous webcast of the
conference call will be available to the public on a listen-only basis
at www.fortress.com.
Please allow extra time prior to the call to visit the site and download
the necessary software required to listen to the internet broadcast. A
telephonic replay of the conference call will also be available by
dialing 1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from
outside of the U.S.); please reference access code "87345292."
ABOUT FORTRESS
Fortress Investment Group LLC (NYSE: FIG) is a leading, highly
diversified global investment management firm with $70.6 billion in
assets under management as of March 31, 2016. Fortress applies its deep
experience and specialized expertise across a range of investment
strategies - private equity, credit, liquid hedge funds and traditional
asset management - on behalf of over 1,750 institutional clients and
private investors worldwide. For more information regarding Fortress
Investment Group LLC or to be added to its e-mail distribution list,
please visit www.fortress.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this press release may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, including statements regarding Fortress's sources of
management fees, incentive income and investment income (loss),
estimated fund performance and the amount and source of expected capital
commitments. These statements are not historical facts, but instead
represent only the Company's beliefs regarding future events, many of
which, by their nature, are inherently uncertain and outside of the
Company's control. It is possible that the sources and amounts of
management fees, incentive income and investment income, the amount and
source of expected capital commitments for any new fund or redemption
amounts may differ, possibly materially, from these forward-looking
statements. Such differences or other changes to forward-looking
statements could cause the Company's actual results to differ materially
from the results expressed or implied by these forward-looking
statements. For a discussion of some of the risks and important factors
that could affect such forward-looking statements, see the sections
entitled "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the
Company's Quarterly Report on Form 10-Q, which is, or will be, available
on the Company's website (www.fortress.com).
In addition, new risks and uncertainties emerge from time to time, and
it is not possible for the Company to predict or assess the impact of
every factor that may cause its actual results to differ from those
contained in any forward-looking statements. Accordingly, you should not
place undue reliance on any forward-looking statements contained in this
press release. The Company can give no assurance that the expectations
of any forward-looking statement will be obtained. Such forward-looking
statements speak only as of the date of this press release. The Company
expressly disclaims any obligation to release publicly any updates or
revisions to any forward-looking statements contained herein to reflect
any change in the Company's expectations with regard thereto or any
change in events, conditions or circumstances on which any statement is
based.
U.S. FEDERAL INCOME TAX IMPLICATIONS OF DIVIDEND
This announcement is intended to be a qualified notice as provided in
the Internal Revenue Code (the "Code") and the Regulations thereunder.
For U.S. federal income tax purposes, the dividend declared in May 2016
will be treated as a partnership distribution. The per share
distribution components are as follows:
|
|
|
|
U.S. Long Term Capital Gain (1)
|
|
|
|
$0.0000
|
|
|
|
|
|
Non-U.S. Long Term Capital Gain
|
|
|
|
$0.0000
|
|
|
|
|
|
U.S. Portfolio Interest Income (2)
|
|
|
|
$0.0500
|
|
|
|
|
|
U.S. Dividend Income (3)
|
|
|
|
$0.0000
|
|
|
|
|
|
Income Not from U.S. Sources (4)
|
|
|
|
$0.0400
|
|
|
|
|
|
Return of Capital
|
|
|
|
$0.1100
|
|
|
|
|
|
Distribution Per Share
|
|
|
|
$0.2000
|
|
|
|
|
(1)
|
|
U.S. Long Term Capital Gain realized on the sale of a United States
Real Property Holding Corporation. As a result, the gain from the
sale will be treated as income that is effectively connected with a
U.S. trade or business.
|
(2)
|
|
Eligible for the U.S. portfolio interest exemption for any holder
not considered a 10-Percent shareholder under §871(h)(3)(B) of the
Code.
|
(3)
|
|
This income is subject to withholding under §1441 of the Code.
|
(4)
|
|
This income is not subject to withholding under §1441 or §1446 of
the Code.
|
|
|
|
|
|
Fortress Investment Group LLC
Consolidated Statements of Operations (Unaudited)
(dollars in thousands, except share data)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2016
|
|
|
2015
|
Revenues
|
|
|
|
|
|
|
Management fees: affiliates
|
|
|
$
|
127,390
|
|
|
|
$
|
127,707
|
|
Management fees: non-affiliates
|
|
|
|
13,419
|
|
|
|
|
15,291
|
|
Incentive income: affiliates
|
|
|
|
31,778
|
|
|
|
|
24,223
|
|
Incentive income: non-affiliates
|
|
|
|
451
|
|
|
|
|
-
|
|
Expense reimbursements: affiliates
|
|
|
|
55,291
|
|
|
|
|
54,565
|
|
Expense reimbursements: non-affiliates
|
|
|
|
1,157
|
|
|
|
|
3,248
|
|
Other revenues
|
|
|
|
2,131
|
|
|
|
|
1,655
|
|
Total Revenues
|
|
|
|
231,617
|
|
|
|
|
226,689
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
|
164,205
|
|
|
|
|
178,888
|
|
General, administrative and other
|
|
|
|
33,126
|
|
|
|
|
42,981
|
|
Depreciation and amortization
|
|
|
|
6,266
|
|
|
|
|
5,331
|
|
Interest expense
|
|
|
|
3,037
|
|
|
|
|
839
|
|
Transfer of interest in Graticule
|
|
|
|
-
|
|
|
|
|
101,000
|
|
Total Expenses
|
|
|
|
206,634
|
|
|
|
|
329,039
|
|
|
|
|
|
|
|
|
Other Income (Loss)
|
|
|
|
|
|
|
Gains (losses)
|
|
|
|
(16,673
|
)
|
|
|
|
31,561
|
|
Tax receivable agreement liability adjustment
|
|
|
|
(2,699
|
)
|
|
|
|
-
|
|
Earnings (losses) from equity method investees
|
|
|
|
(20,780
|
)
|
|
|
|
41,708
|
|
Gain on transfer of Graticule
|
|
|
|
-
|
|
|
|
|
134,400
|
|
Total Other Income (Loss)
|
|
|
|
(40,152
|
)
|
|
|
|
207,669
|
|
|
|
|
|
|
|
|
Income (Loss) Before Income Taxes
|
|
|
|
(15,169
|
)
|
|
|
|
105,319
|
|
Income tax benefit (expense)
|
|
|
|
(783
|
)
|
|
|
|
(18,399
|
)
|
Net Income (Loss)
|
|
|
$
|
(15,952
|
)
|
|
|
$
|
86,920
|
|
Allocation of Net Income (Loss)
|
|
|
|
|
|
|
Principals' and Others' Interests in Income (Loss) of Consolidated
Subsidiaries
|
|
|
|
(7,426
|
)
|
|
|
|
52,223
|
|
Redeemable Non-Controlling Interests in Income (Loss) of
Consolidated Subsidiaries
|
|
|
|
-
|
|
|
|
|
(16
|
)
|
Net Income (Loss) Attributable to Class A Shareholders
|
|
|
|
(8,526
|
)
|
|
|
|
34,713
|
|
|
|
|
$
|
(15,952
|
)
|
|
|
$
|
86,920
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per Class A Share
|
|
|
|
|
|
|
Net income (loss) per Class A share, basic
|
|
|
$
|
(0.04
|
)
|
|
|
$
|
0.15
|
|
Net income (loss) per Class A share, diluted
|
|
|
$
|
(0.04
|
)
|
|
|
$
|
0.15
|
|
Weighted average number of Class A shares outstanding, basic
|
|
|
|
220,847,407
|
|
|
|
|
215,785,776
|
|
Weighted average number of Class A shares outstanding, diluted
|
|
|
|
220,847,407
|
|
|
|
|
221,535,189
|
|
|
|
|
|
|
|
|
|
|
Fortress Investment Group LLC
Consolidated Balance Sheets
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
March 31, 2016
(Unaudited)
|
|
|
December 31, 2015
|
Assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
225,553
|
|
|
|
$
|
339,842
|
|
Due from affiliates
|
|
|
|
216,646
|
|
|
|
|
273,811
|
|
Investments
|
|
|
|
977,996
|
|
|
|
|
1,055,789
|
|
Investments in options
|
|
|
|
27,932
|
|
|
|
|
30,427
|
|
Deferred tax asset, net
|
|
|
|
418,773
|
|
|
|
|
427,102
|
|
Other assets
|
|
|
|
141,389
|
|
|
|
|
148,310
|
|
Total Assets
|
|
|
$
|
2,008,289
|
|
|
|
$
|
2,275,281
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Accrued compensation and benefits
|
|
|
$
|
116,015
|
|
|
|
$
|
318,750
|
|
Due to affiliates
|
|
|
|
370,061
|
|
|
|
|
365,218
|
|
Deferred incentive income
|
|
|
|
290,744
|
|
|
|
|
332,329
|
|
Debt obligations payable
|
|
|
|
260,677
|
|
|
|
|
230,677
|
|
Other liabilities
|
|
|
|
116,885
|
|
|
|
|
86,503
|
|
Total Liabilities
|
|
|
$
|
1,154,382
|
|
|
|
$
|
1,333,477
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Non-controlling Interests
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Class A shares, no par value, 1,000,000,000 shares authorized,
216,384,655
|
|
|
|
|
|
|
and 216,790,409 shares issued and outstanding at March 31, 2016 and
|
|
|
|
|
|
|
December 31, 2015, respectively
|
|
|
|
-
|
|
|
|
|
-
|
|
Class B shares, no par value, 750,000,000 shares authorized,
169,514,478
|
|
|
|
|
|
|
shares issued and outstanding at March 31, 2016 and December 31, 2015
|
|
|
|
-
|
|
|
|
|
-
|
|
Paid-in capital
|
|
|
|
1,971,125
|
|
|
|
|
1,988,707
|
|
Retained earnings (accumulated deficit)
|
|
|
|
(1,436,796
|
)
|
|
|
|
(1,415,113
|
)
|
Accumulated other comprehensive income (loss)
|
|
|
|
(2,995
|
)
|
|
|
|
(2,909
|
)
|
|
|
|
|
|
|
|
Total Fortress shareholders' equity
|
|
|
|
531,334
|
|
|
|
|
570,685
|
|
Principals' and others' interests in equity of consolidated
subsidiaries
|
|
|
|
322,573
|
|
|
|
|
371,119
|
|
Total Equity
|
|
|
|
853,907
|
|
|
|
|
941,804
|
|
|
|
|
$
|
2,008,289
|
|
|
|
$
|
2,275,281
|
|
|
|
|
|
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 1-a
Supplemental Data for the Three Months Ended March 31, 2016 and
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
Private Equity
|
|
|
Credit Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent Capital
|
|
|
|
|
|
|
|
|
Liquid Hedge
|
|
|
|
(in millions)
|
|
|
Total
|
|
|
Funds
|
|
|
Vehicles
|
|
|
Hedge Funds
|
|
|
PE Funds
|
|
|
Funds
|
|
|
Logan Circle
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - January 1, 2016
|
|
|
$
|
70,501
|
|
|
|
$
|
8,991
|
|
|
|
$
|
6,816
|
|
|
|
$
|
8,799
|
|
|
|
$
|
9,308
|
|
|
|
$
|
5,409
|
|
|
|
$
|
31,178
|
|
Capital raised
|
|
|
|
344
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
268
|
|
|
|
|
13
|
|
|
|
|
63
|
|
|
|
|
-
|
|
Equity raised (Permanent Capital Vehicles)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Increase in invested capital
|
|
|
|
332
|
|
|
|
|
10
|
|
|
|
|
-
|
|
|
|
|
66
|
|
|
|
|
256
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Capital acquisitions
|
|
|
|
682
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
682
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Redemptions
|
|
|
|
(269
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(36
|
)
|
|
|
|
-
|
|
|
|
|
(233
|
)
|
|
|
|
-
|
|
RCA distributions8
|
|
|
|
(124
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(124
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Return of capital distributions
|
|
|
|
(582
|
)
|
|
|
|
(254
|
)
|
|
|
|
(35
|
)
|
|
|
|
-
|
|
|
|
|
(274
|
)
|
|
|
|
(19
|
)
|
|
|
|
-
|
|
Adjustment for capital reset
|
|
|
|
(650
|
)
|
|
|
|
(650
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Crystallized Incentive Income
|
|
|
|
(53
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(53
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Equity buyback
|
|
|
|
(42
|
)
|
|
|
|
-
|
|
|
|
|
(42
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Change in AUM of Affiliated Managers and co-managed funds
|
|
|
|
(291
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(264
|
)
|
|
|
|
-
|
|
|
|
|
(27
|
)
|
|
|
|
-
|
|
Net Client Flows
|
|
|
|
261
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
261
|
|
Income (loss) and foreign exchange
|
|
|
|
528
|
|
|
|
|
(918
|
)
|
|
|
|
34
|
|
|
|
|
(2
|
)
|
|
|
|
50
|
|
|
|
|
2
|
|
|
|
|
1,362
|
|
AUM - Ending Balance
|
|
|
$
|
70,637
|
|
|
|
$
|
7,179
|
|
|
|
$
|
6,773
|
|
|
|
$
|
9,336
|
|
|
|
$
|
9,353
|
|
|
|
$
|
5,195
|
|
|
|
$
|
32,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
348
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
272
|
|
|
|
$
|
13
|
|
|
|
$
|
63
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
141
|
|
|
|
$
|
26
|
|
|
|
$
|
27
|
|
|
|
$
|
37
|
|
|
|
$
|
31
|
|
|
|
$
|
6
|
|
|
|
$
|
14
|
|
Incentive income
|
|
|
|
64
|
|
|
|
|
-
|
|
|
|
|
2
|
|
|
|
|
7
|
|
|
|
|
53
|
|
|
|
|
2
|
|
|
|
|
-
|
|
Total
|
|
|
|
205
|
|
|
|
|
26
|
|
|
|
|
29
|
|
|
|
|
44
|
|
|
|
|
84
|
|
|
|
|
8
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(109
|
)
|
|
|
|
(10
|
)
|
|
|
|
(19
|
)
|
|
|
|
(26
|
)
|
|
|
|
(32
|
)
|
|
|
|
(9
|
)
|
|
|
|
(13
|
)
|
Profit sharing compensation expenses
|
|
|
|
(31
|
)
|
|
|
|
-
|
|
|
|
|
(1
|
)
|
|
|
|
(3
|
)
|
|
|
|
(26
|
)
|
|
|
|
(1
|
)
|
|
|
|
-
|
|
Total
|
|
|
|
(140
|
)
|
|
|
|
(10
|
)
|
|
|
|
(20
|
)
|
|
|
|
(29
|
)
|
|
|
|
(58
|
)
|
|
|
|
(10
|
)
|
|
|
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Managers
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
66
|
|
|
|
|
16
|
|
|
|
|
9
|
|
|
|
|
15
|
|
|
|
|
26
|
|
|
|
|
(1
|
)
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
(3
|
)
|
|
|
|
-
|
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
63
|
|
|
|
|
16
|
|
|
|
|
8
|
|
|
|
|
14
|
|
|
|
|
25
|
|
|
|
|
(1
|
)
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income
|
|
|
|
5
|
|
|
|
|
(2
|
)
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|
|
|
-
|
|
Unallocated Investment Income
|
|
|
|
(1
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Unallocated Expenses
|
|
|
|
(3
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
64
|
|
|
|
$
|
14
|
|
|
|
$
|
9
|
|
|
|
$
|
14
|
|
|
|
$
|
28
|
|
|
|
$
|
2
|
|
|
|
$
|
1
|
|
Pre-tax Distributable Earnings per Dividend Paying Share
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2015
|
|
|
|
|
|
|
Private Equity
|
|
|
Credit Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent Capital
|
|
|
|
|
|
|
|
|
Liquid Hedge
|
|
|
|
(in millions)
|
|
|
Total
|
|
|
Funds
|
|
|
Vehicles
|
|
|
Hedge Funds
|
|
|
PE Funds
|
|
|
Funds
|
|
|
Logan Circle
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - January 1, 2015
|
|
|
$
|
67,531
|
|
|
|
$
|
9,366
|
|
|
|
$
|
4,567
|
|
|
|
$
|
6,173
|
|
|
|
$
|
6,955
|
|
|
|
$
|
8,128
|
|
|
|
$
|
32,342
|
|
Capital raised
|
|
|
|
495
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
175
|
|
|
|
|
234
|
|
|
|
|
86
|
|
|
|
|
-
|
|
Equity raised (Permanent Capital Vehicles)
|
|
|
|
150
|
|
|
|
|
-
|
|
|
|
|
150
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Increase in invested capital
|
|
|
|
718
|
|
|
|
|
61
|
|
|
|
|
60
|
|
|
|
|
15
|
|
|
|
|
582
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Redemptions
|
|
|
|
(785
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(52
|
)
|
|
|
|
-
|
|
|
|
|
(733
|
)
|
|
|
|
-
|
|
RCA distributions8
|
|
|
|
(66
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(66
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Return of capital distributions
|
|
|
|
(524
|
)
|
|
|
|
(95
|
)
|
|
|
|
(99
|
)
|
|
|
|
-
|
|
|
|
|
(288
|
)
|
|
|
|
(42
|
)
|
|
|
|
-
|
|
Crystallized Incentive Income
|
|
|
|
(95
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(95
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Change in AUM of Affiliated Managers and co-managed funds
|
|
|
|
494
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
494
|
|
|
|
|
-
|
|
Net Client Flows
|
|
|
|
589
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
589
|
|
Income (loss) and foreign exchange
|
|
|
|
1,382
|
|
|
|
|
847
|
|
|
|
|
(56
|
)
|
|
|
|
121
|
|
|
|
|
80
|
|
|
|
|
(95
|
)
|
|
|
|
485
|
|
AUM - Ending Balance
|
|
|
$
|
69,889
|
|
|
|
$
|
10,179
|
|
|
|
$
|
4,622
|
|
|
|
$
|
6,271
|
|
|
|
$
|
7,563
|
|
|
|
$
|
7,838
|
|
|
|
$
|
33,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
5,360
|
|
|
|
$
|
-
|
|
|
|
$
|
150
|
|
|
|
$
|
175
|
|
|
|
$
|
4,949
|
|
|
|
$
|
86
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
139
|
|
|
|
$
|
29
|
|
|
|
$
|
19
|
|
|
|
$
|
30
|
|
|
|
$
|
27
|
|
|
|
$
|
21
|
|
|
|
$
|
13
|
|
Incentive income
|
|
|
|
51
|
|
|
|
|
-
|
|
|
|
|
3
|
|
|
|
|
23
|
|
|
|
|
24
|
|
|
|
|
1
|
|
|
|
|
-
|
|
Total
|
|
|
|
190
|
|
|
|
|
29
|
|
|
|
|
22
|
|
|
|
|
53
|
|
|
|
|
51
|
|
|
|
|
22
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(115
|
)
|
|
|
|
(14
|
)
|
|
|
|
(18
|
)
|
|
|
|
(18
|
)
|
|
|
|
(30
|
)
|
|
|
|
(21
|
)
|
|
|
|
(14
|
)
|
Profit sharing compensation expenses
|
|
|
|
(30
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(12
|
)
|
|
|
|
(14
|
)
|
|
|
|
(4
|
)
|
|
|
|
-
|
|
Total
|
|
|
|
(145
|
)
|
|
|
|
(14
|
)
|
|
|
|
(18
|
)
|
|
|
|
(30
|
)
|
|
|
|
(44
|
)
|
|
|
|
(25
|
)
|
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Managers
|
|
|
|
9
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
9
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
54
|
|
|
|
|
15
|
|
|
|
|
4
|
|
|
|
|
23
|
|
|
|
|
7
|
|
|
|
|
6
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
(3
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(2
|
)
|
|
|
|
(1
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
51
|
|
|
|
|
15
|
|
|
|
|
4
|
|
|
|
|
21
|
|
|
|
|
6
|
|
|
|
|
6
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income
|
|
|
|
5
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
3
|
|
|
|
|
-
|
|
Unallocated Investment Income
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Unallocated Expenses
|
|
|
|
(1
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
55
|
|
|
|
$
|
15
|
|
|
|
$
|
4
|
|
|
|
$
|
22
|
|
|
|
$
|
7
|
|
|
|
$
|
9
|
|
|
|
$
|
(1
|
)
|
Pre-tax Distributable Earnings per Dividend Paying Share
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________________________
|
|
8 Represents distributions from (i) assets held by
redeeming capital accounts in the Drawbridge Special Opportunities
Funds, and (ii) the Value Recovery Funds.
|
|
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 2-a
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
December 31,
|
|
|
Full Year
|
|
|
Ended March 31,
|
Fortress
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2016
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Equity Funds
|
|
|
$
|
10,179
|
|
|
|
$
|
9,587
|
|
|
|
$
|
9,195
|
|
|
|
$
|
8,991
|
|
|
|
$
|
8,991
|
|
|
|
$
|
7,179
|
|
Permanent Capital Vehicles
|
|
|
|
4,622
|
|
|
|
|
6,948
|
|
|
|
|
6,896
|
|
|
|
|
6,816
|
|
|
|
|
6,816
|
|
|
|
|
6,773
|
|
Credit Hedge Funds9
|
|
|
|
6,271
|
|
|
|
|
6,244
|
|
|
|
|
9,070
|
|
|
|
|
8,799
|
|
|
|
|
8,799
|
|
|
|
|
9,336
|
|
Credit Private Equity Funds
|
|
|
|
7,563
|
|
|
|
|
8,247
|
|
|
|
|
8,356
|
|
|
|
|
9,308
|
|
|
|
|
9,308
|
|
|
|
|
9,353
|
|
Liquid Hedge Funds10
|
|
|
|
7,838
|
|
|
|
|
7,377
|
|
|
|
|
7,367
|
|
|
|
|
5,409
|
|
|
|
|
5,409
|
|
|
|
|
5,195
|
|
Logan Circle
|
|
|
|
33,416
|
|
|
|
|
33,564
|
|
|
|
|
33,446
|
|
|
|
|
31,178
|
|
|
|
|
31,178
|
|
|
|
|
32,801
|
|
AUM - Ending Balance
|
|
|
$
|
69,889
|
|
|
|
$
|
71,967
|
|
|
|
$
|
74,330
|
|
|
|
$
|
70,501
|
|
|
|
$
|
70,501
|
|
|
|
$
|
70,637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
5,360
|
|
|
|
$
|
3,213
|
|
|
|
$
|
204
|
|
|
|
$
|
215
|
|
|
|
$
|
8,992
|
|
|
|
$
|
348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
139
|
|
|
|
$
|
144
|
|
|
|
$
|
151
|
|
|
|
$
|
148
|
|
|
|
$
|
582
|
|
|
|
$
|
141
|
|
Incentive income
|
|
|
|
51
|
|
|
|
|
183
|
|
|
|
|
70
|
|
|
|
|
132
|
|
|
|
|
436
|
|
|
|
|
64
|
|
Total
|
|
|
|
190
|
|
|
|
|
327
|
|
|
|
|
221
|
|
|
|
|
280
|
|
|
|
|
1,018
|
|
|
|
|
205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(115
|
)
|
|
|
|
(121
|
)
|
|
|
|
(112
|
)
|
|
|
|
(105
|
)
|
|
|
|
(453
|
)
|
|
|
|
(109
|
)
|
Profit sharing compensation expenses
|
|
|
|
(30
|
)
|
|
|
|
(54
|
)
|
|
|
|
(37
|
)
|
|
|
|
(47
|
)
|
|
|
|
(168
|
)
|
|
|
|
(31
|
)
|
Total
|
|
|
|
(145
|
)
|
|
|
|
(175
|
)
|
|
|
|
(149
|
)
|
|
|
|
(152
|
)
|
|
|
|
(621
|
)
|
|
|
|
(140
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Managers
|
|
|
|
9
|
|
|
|
|
(1
|
)
|
|
|
|
2
|
|
|
|
|
(1
|
)
|
|
|
|
9
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
54
|
|
|
|
|
151
|
|
|
|
|
74
|
|
|
|
|
127
|
|
|
|
|
406
|
|
|
|
|
66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
(3
|
)
|
|
|
|
(18
|
)
|
|
|
|
(7
|
)
|
|
|
|
(14
|
)
|
|
|
|
(42
|
)
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
$
|
51
|
|
|
|
$
|
133
|
|
|
|
$
|
67
|
|
|
|
$
|
113
|
|
|
|
$
|
364
|
|
|
|
$
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
2
|
|
|
|
|
17
|
|
|
|
|
27
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
55
|
|
|
|
$
|
137
|
|
|
|
$
|
69
|
|
|
|
$
|
130
|
|
|
|
$
|
391
|
|
|
|
$
|
64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________________________
|
|
9 The Assets Under Management presented for the Credit
Hedge Funds includes $2,589 million related to co-managed funds as
of 1Q 2016.
|
|
10 The Assets Under Management presented for the Liquid
Hedge Funds includes $4,469 million related to Affiliated Managers
as of 1Q 2016.
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 2-b
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
December 31,
|
|
|
Full Year
|
|
|
Ended March 31,
|
Private Equity Funds
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Main Funds11
|
|
|
$
|
7,726
|
|
|
|
$
|
7,128
|
|
|
|
$
|
6,874
|
|
|
|
$
|
6,530
|
|
|
|
$
|
6,530
|
|
|
|
$
|
4,907
|
|
Coinvestment Funds12
|
|
|
|
1,994
|
|
|
|
|
1,902
|
|
|
|
|
1,785
|
|
|
|
|
1,729
|
|
|
|
|
1,729
|
|
|
|
|
1,552
|
|
MSR Opportunities Funds13
|
|
|
|
336
|
|
|
|
|
417
|
|
|
|
|
388
|
|
|
|
|
360
|
|
|
|
|
360
|
|
|
|
|
333
|
|
Italian NPL Opportunities Fund
|
|
|
|
19
|
|
|
|
|
20
|
|
|
|
|
20
|
|
|
|
|
225
|
|
|
|
|
225
|
|
|
|
|
231
|
|
Fortress Equity Partners
|
|
|
|
104
|
|
|
|
|
120
|
|
|
|
|
128
|
|
|
|
|
147
|
|
|
|
|
147
|
|
|
|
|
156
|
|
AUM - Ending Balance
|
|
|
$
|
10,179
|
|
|
|
$
|
9,587
|
|
|
|
$
|
9,195
|
|
|
|
$
|
8,991
|
|
|
|
$
|
8,991
|
|
|
|
$
|
7,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
29
|
|
|
|
$
|
29
|
|
|
|
$
|
29
|
|
|
|
$
|
29
|
|
|
|
$
|
116
|
|
|
|
$
|
26
|
|
Incentive income
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Total
|
|
|
|
29
|
|
|
|
|
29
|
|
|
|
|
29
|
|
|
|
|
29
|
|
|
|
|
116
|
|
|
|
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(14
|
)
|
|
|
|
(15
|
)
|
|
|
|
(13
|
)
|
|
|
|
(3
|
)
|
|
|
|
(45
|
)
|
|
|
|
(10
|
)
|
Profit sharing compensation expenses
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
-
|
|
Total
|
|
|
|
(14
|
)
|
|
|
|
(15
|
)
|
|
|
|
(13
|
)
|
|
|
|
(2
|
)
|
|
|
|
(44
|
)
|
|
|
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
15
|
|
|
|
|
14
|
|
|
|
|
16
|
|
|
|
|
27
|
|
|
|
|
72
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
$
|
15
|
|
|
|
$
|
14
|
|
|
|
$
|
16
|
|
|
|
$
|
27
|
|
|
|
$
|
72
|
|
|
|
$
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
15
|
|
|
|
$
|
14
|
|
|
|
$
|
16
|
|
|
|
$
|
27
|
|
|
|
$
|
72
|
|
|
|
$
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________________________
|
|
11 Combined AUM for Fund III, Fund IV and Fund V. Fund
III passed its contractual maturity date in 1Q 2016 and is in the
process of an orderly wind down.
|
|
12 Combined AUM for Fund III Coinvestment, Fund IV
Coinvestment, Fund V Coinvestment, FICO, FHIF and FECI. Fund III
Coinvestment passed its contractual maturity date in 1Q 2016 and
is in the process of an orderly wind down.
|
|
13 Combined AUM for MSR Opportunities Fund I A, MSR
Opportunities Fund I B, MSR Opportunities Fund II A, MSR
Opportunities Fund II B and MSR Opportunities Fund MA I.
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 2-c
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
December 31,
|
|
|
Full Year
|
|
|
Ended March 31,
|
Permanent Capital Vehicles
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newcastle Investment Corp.
|
|
|
$
|
680
|
|
|
|
$
|
680
|
|
|
|
$
|
680
|
|
|
|
$
|
680
|
|
|
|
$
|
680
|
|
|
|
$
|
680
|
|
New Residential Investment Corp.
|
|
|
|
1,367
|
|
|
|
|
2,725
|
|
|
|
|
2,689
|
|
|
|
|
2,689
|
|
|
|
|
2,689
|
|
|
|
|
2,689
|
|
Eurocastle Investment Limited
|
|
|
|
432
|
|
|
|
|
626
|
|
|
|
|
605
|
|
|
|
|
567
|
|
|
|
|
567
|
|
|
|
|
608
|
|
New Media Investment Group Inc.
|
|
|
|
637
|
|
|
|
|
637
|
|
|
|
|
637
|
|
|
|
|
637
|
|
|
|
|
637
|
|
|
|
|
637
|
|
New Senior Investment Group Inc.
|
|
|
|
813
|
|
|
|
|
1,089
|
|
|
|
|
1,089
|
|
|
|
|
1,076
|
|
|
|
|
1,076
|
|
|
|
|
1,024
|
|
Fortress Transportation and Infrastructure Investors LLC14
|
|
|
|
693
|
|
|
|
|
1,191
|
|
|
|
|
1,196
|
|
|
|
|
1,167
|
|
|
|
|
1,167
|
|
|
|
|
1,135
|
|
AUM - Ending Balance
|
|
|
$
|
4,622
|
|
|
|
$
|
6,948
|
|
|
|
$
|
6,896
|
|
|
|
$
|
6,816
|
|
|
|
$
|
6,816
|
|
|
|
$
|
6,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
150
|
|
|
|
$
|
2,291
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
2,441
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
19
|
|
|
|
$
|
23
|
|
|
|
$
|
27
|
|
|
|
$
|
27
|
|
|
|
$
|
96
|
|
|
|
$
|
27
|
|
Incentive income
|
|
|
|
3
|
|
|
|
|
74
|
|
|
|
|
(1
|
)
|
|
|
|
30
|
|
|
|
|
106
|
|
|
|
|
2
|
|
Total
|
|
|
|
22
|
|
|
|
|
97
|
|
|
|
|
26
|
|
|
|
|
57
|
|
|
|
|
202
|
|
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(18
|
)
|
|
|
|
(16
|
)
|
|
|
|
(16
|
)
|
|
|
|
(19
|
)
|
|
|
|
(69
|
)
|
|
|
|
(19
|
)
|
Profit sharing compensation expenses
|
|
|
|
-
|
|
|
|
|
(9
|
)
|
|
|
|
1
|
|
|
|
|
(3
|
)
|
|
|
|
(11
|
)
|
|
|
|
(1
|
)
|
Total
|
|
|
|
(18
|
)
|
|
|
|
(25
|
)
|
|
|
|
(15
|
)
|
|
|
|
(22
|
)
|
|
|
|
(80
|
)
|
|
|
|
(20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
4
|
|
|
|
|
72
|
|
|
|
|
11
|
|
|
|
|
35
|
|
|
|
|
122
|
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
-
|
|
|
|
|
(11
|
)
|
|
|
|
(3
|
)
|
|
|
|
(5
|
)
|
|
|
|
(19
|
)
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
$
|
4
|
|
|
|
$
|
61
|
|
|
|
$
|
8
|
|
|
|
$
|
30
|
|
|
|
$
|
103
|
|
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
4
|
|
|
|
$
|
62
|
|
|
|
$
|
8
|
|
|
|
$
|
31
|
|
|
|
$
|
105
|
|
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________________________
|
|
14 All of the capital of Worldwide Transportation and
Infrastructure Investors ("WWTAI"), a private fund formerly managed
by Fortress, was contributed to FTAI which completed its initial
public offering in 2Q 2015.
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 2-d
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
December 31,
|
|
|
Full Year
|
|
|
Ended March 31,
|
Credit Hedge Funds
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drawbridge Special Opportunities Funds15
|
|
|
$
|
6,023
|
|
|
|
$
|
6,021
|
|
|
|
$
|
5,808
|
|
|
|
$
|
5,756
|
|
|
|
$
|
5,756
|
|
|
|
$
|
5,816
|
|
Third Party Originated Funds16
|
|
|
|
189
|
|
|
|
|
156
|
|
|
|
|
150
|
|
|
|
|
102
|
|
|
|
|
102
|
|
|
|
|
815
|
|
Japan Income Fund
|
|
|
|
59
|
|
|
|
|
67
|
|
|
|
|
94
|
|
|
|
|
88
|
|
|
|
|
88
|
|
|
|
|
116
|
|
Co-Managed Funds17
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
3,018
|
|
|
|
|
2,853
|
|
|
|
|
2,853
|
|
|
|
|
2,589
|
|
AUM - Ending Balance
|
|
|
$
|
6,271
|
|
|
|
$
|
6,244
|
|
|
|
$
|
9,070
|
|
|
|
$
|
8,799
|
|
|
|
$
|
8,799
|
|
|
|
$
|
9,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
175
|
|
|
|
$
|
79
|
|
|
|
$
|
-
|
|
|
|
$
|
21
|
|
|
|
$
|
275
|
|
|
|
$
|
272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
30
|
|
|
|
$
|
29
|
|
|
|
$
|
37
|
|
|
|
$
|
38
|
|
|
|
$
|
134
|
|
|
|
$
|
37
|
|
Incentive income
|
|
|
|
23
|
|
|
|
|
50
|
|
|
|
|
1
|
|
|
|
|
11
|
|
|
|
|
85
|
|
|
|
|
7
|
|
Total
|
|
|
|
53
|
|
|
|
|
79
|
|
|
|
|
38
|
|
|
|
|
49
|
|
|
|
|
219
|
|
|
|
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(18
|
)
|
|
|
|
(19
|
)
|
|
|
|
(21
|
)
|
|
|
|
(27
|
)
|
|
|
|
(85
|
)
|
|
|
|
(26
|
)
|
Profit sharing compensation expenses
|
|
|
|
(12
|
)
|
|
|
|
(18
|
)
|
|
|
|
(1
|
)
|
|
|
|
(5
|
)
|
|
|
|
(36
|
)
|
|
|
|
(3
|
)
|
Total
|
|
|
|
(30
|
)
|
|
|
|
(37
|
)
|
|
|
|
(22
|
)
|
|
|
|
(32
|
)
|
|
|
|
(121
|
)
|
|
|
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
23
|
|
|
|
|
42
|
|
|
|
|
16
|
|
|
|
|
17
|
|
|
|
|
98
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
(2
|
)
|
|
|
|
(6
|
)
|
|
|
|
(3
|
)
|
|
|
|
(4
|
)
|
|
|
|
(15
|
)
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
$
|
21
|
|
|
|
$
|
36
|
|
|
|
$
|
13
|
|
|
|
$
|
13
|
|
|
|
$
|
83
|
|
|
|
$
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
22
|
|
|
|
$
|
36
|
|
|
|
$
|
13
|
|
|
|
$
|
14
|
|
|
|
$
|
85
|
|
|
|
$
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Returns18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drawbridge Special Opportunities Fund LP
|
|
|
|
2.2
|
%
|
|
|
|
2.3
|
%
|
|
|
|
0.3
|
%
|
|
|
|
0.9
|
%
|
|
|
|
5.8
|
%
|
|
|
|
0.6
|
%
|
Drawbridge Special Opportunities Fund Ltd
|
|
|
|
1.1
|
%
|
|
|
|
0.4
|
%
|
|
|
|
(0.8
|
%)
|
|
|
|
0.0
|
%
|
|
|
|
0.6
|
%
|
|
|
|
(1.3
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________________________
|
|
15 Combined AUM for Drawbridge Special Opportunities Fund
LP, Drawbridge Special Opportunities Fund Ltd, Drawbridge Special
Opportunities Fund managed accounts, Worden Fund LP and Worden Fund
II LP. Worden Fund II LP was closed in 1Q 2016.
|
|
16 Combined AUM for the third party originated JP Funds
and third party originated Value Recovery Funds. Fortress began
managing the JP Funds in March 2016.
|
|
17 Combined AUM for the Mount Kellett investment funds
and related accounts. In 3Q 2015, Fortress became co-manager of
the Mount Kellett Funds.
|
|
18 The performance data contained herein reflects
returns for a "new issue eligible," single investor class as of
the close of business on the last day of the relevant period. Net
returns reflect performance data after taking into account
management fees borne by the Fund and incentive allocations. The
returns for the Drawbridge Special Opportunities Funds reflect the
performance of each fund excluding special investments and the
performance of the redeeming capital accounts which relate to
December 31, 2009, December 31, 2010, December 31, 2011, December
31, 2012, December 31, 2013, December 31, 2014 and December 31,
2015 redemptions.
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 2-e
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
December 31,
|
|
|
Full Year
|
|
|
Ended March 31,
|
Credit Private Equity Funds
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Dated Value Funds19
|
|
|
$
|
352
|
|
|
|
$
|
315
|
|
|
|
$
|
315
|
|
|
|
$
|
315
|
|
|
|
$
|
315
|
|
|
|
$
|
292
|
|
Real Assets Funds
|
|
|
|
52
|
|
|
|
|
40
|
|
|
|
|
41
|
|
|
|
|
24
|
|
|
|
|
24
|
|
|
|
|
50
|
|
Fortress Credit Opportunities Funds20
|
|
|
|
6,029
|
|
|
|
|
6,802
|
|
|
|
|
6,796
|
|
|
|
|
6,848
|
|
|
|
|
6,848
|
|
|
|
|
6,894
|
|
Japan Opportunity Funds21
|
|
|
|
1,130
|
|
|
|
|
1,090
|
|
|
|
|
1,204
|
|
|
|
|
2,120
|
|
|
|
|
2,120
|
|
|
|
|
2,117
|
|
AUM - Ending Balance
|
|
|
$
|
7,563
|
|
|
|
$
|
8,247
|
|
|
|
$
|
8,356
|
|
|
|
$
|
9,308
|
|
|
|
$
|
9,308
|
|
|
|
$
|
9,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
4,949
|
|
|
|
$
|
672
|
|
|
|
$
|
156
|
|
|
|
$
|
166
|
|
|
|
$
|
5,943
|
|
|
|
$
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
27
|
|
|
|
$
|
30
|
|
|
|
$
|
29
|
|
|
|
$
|
32
|
|
|
|
$
|
118
|
|
|
|
$
|
31
|
|
Incentive income
|
|
|
|
24
|
|
|
|
|
60
|
|
|
|
|
70
|
|
|
|
|
90
|
|
|
|
|
244
|
|
|
|
|
53
|
|
Total
|
|
|
|
51
|
|
|
|
|
90
|
|
|
|
|
99
|
|
|
|
|
122
|
|
|
|
|
362
|
|
|
|
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(30
|
)
|
|
|
|
(30
|
)
|
|
|
|
(29
|
)
|
|
|
|
(26
|
)
|
|
|
|
(115
|
)
|
|
|
|
(32
|
)
|
Profit sharing compensation expenses
|
|
|
|
(14
|
)
|
|
|
|
(30
|
)
|
|
|
|
(36
|
)
|
|
|
|
(41
|
)
|
|
|
|
(121
|
)
|
|
|
|
(26
|
)
|
Total
|
|
|
|
(44
|
)
|
|
|
|
(60
|
)
|
|
|
|
(65
|
)
|
|
|
|
(67
|
)
|
|
|
|
(236
|
)
|
|
|
|
(58
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
7
|
|
|
|
|
30
|
|
|
|
|
34
|
|
|
|
|
55
|
|
|
|
|
126
|
|
|
|
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|
|
|
(5
|
)
|
|
|
|
(8
|
)
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
$
|
6
|
|
|
|
$
|
29
|
|
|
|
$
|
33
|
|
|
|
$
|
50
|
|
|
|
$
|
118
|
|
|
|
$
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
1
|
|
|
|
|
3
|
|
|
|
|
5
|
|
|
|
|
12
|
|
|
|
|
21
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
7
|
|
|
|
$
|
32
|
|
|
|
$
|
38
|
|
|
|
$
|
62
|
|
|
|
$
|
139
|
|
|
|
$
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________________________
|
|
19 Combined AUM for Long Dated Value Fund I, Long Dated
Value Fund II, Long Dated Value Fund III and LDVF Patent Fund.
|
|
20 Combined AUM for Credit Opportunities Fund, Credit
Opportunities Fund II, Credit Opportunities Fund III, Credit
Opportunities Fund IV, FCO Managed Accounts, Global Opportunities
Funds, Life Settlements Fund, Life Settlements Fund MA, SIP managed
account, Real Estate Opportunities Fund, Real Estate Opportunities
Fund II and Real Estate Opportunities REOC Fund.
|
|
21 Combined AUM for Japan Opportunity Fund, Japan
Opportunity Fund II (Dollar), Japan Opportunity Fund II (Yen), Japan
Opportunity Fund III (Dollar) and Japan Opportunity Fund III (Yen).
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 2-f
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
December 31,
|
|
|
Full Year
|
|
|
Ended March 31,
|
Liquid Hedge Funds
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortress Macro Funds22
|
|
|
$
|
2,779
|
|
|
|
$
|
2,326
|
|
|
|
$
|
1,791
|
|
|
|
|
N/A
|
|
|
|
|
N/A
|
|
|
|
|
N/A
|
|
Drawbridge Global Macro Funds23
|
|
|
|
227
|
|
|
|
|
210
|
|
|
|
|
193
|
|
|
|
|
101
|
|
|
|
|
101
|
|
|
|
|
116
|
|
Fortress Convex Asia Funds24
|
|
|
|
226
|
|
|
|
|
220
|
|
|
|
|
208
|
|
|
|
|
134
|
|
|
|
|
134
|
|
|
|
|
176
|
|
Fortress Centaurus Global Funds25
|
|
|
|
64
|
|
|
|
|
191
|
|
|
|
|
222
|
|
|
|
|
204
|
|
|
|
|
204
|
|
|
|
|
206
|
|
Fortress Partners Funds26
|
|
|
|
541
|
|
|
|
|
534
|
|
|
|
|
497
|
|
|
|
|
474
|
|
|
|
|
474
|
|
|
|
|
228
|
|
Affiliated Managers27
|
|
|
|
4,001
|
|
|
|
|
3,896
|
|
|
|
|
4,456
|
|
|
|
|
4,496
|
|
|
|
|
4,496
|
|
|
|
|
4,469
|
|
AUM - Ending Balance
|
|
|
$
|
7,838
|
|
|
|
$
|
7,377
|
|
|
|
$
|
7,367
|
|
|
|
$
|
5,409
|
|
|
|
$
|
5,409
|
|
|
|
$
|
5,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
86
|
|
|
|
$
|
171
|
|
|
|
$
|
48
|
|
|
|
$
|
28
|
|
|
|
$
|
333
|
|
|
|
$
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
21
|
|
|
|
$
|
19
|
|
|
|
$
|
16
|
|
|
|
$
|
8
|
|
|
|
$
|
64
|
|
|
|
$
|
6
|
|
Incentive income
|
|
|
|
1
|
|
|
|
|
(1
|
)
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
2
|
|
Total
|
|
|
|
22
|
|
|
|
|
18
|
|
|
|
|
16
|
|
|
|
|
9
|
|
|
|
|
65
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(21
|
)
|
|
|
|
(27
|
)
|
|
|
|
(20
|
)
|
|
|
|
(16
|
)
|
|
|
|
(84
|
)
|
|
|
|
(9
|
)
|
Profit sharing compensation expenses
|
|
|
|
(4
|
)
|
|
|
|
3
|
|
|
|
|
(1
|
)
|
|
|
|
1
|
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
Total
|
|
|
|
(25
|
)
|
|
|
|
(24
|
)
|
|
|
|
(21
|
)
|
|
|
|
(15
|
)
|
|
|
|
(85
|
)
|
|
|
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Managers
|
|
|
|
9
|
|
|
|
|
(1
|
)
|
|
|
|
2
|
|
|
|
|
(1
|
)
|
|
|
|
9
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
6
|
|
|
|
|
(7
|
)
|
|
|
|
(3
|
)
|
|
|
|
(7
|
)
|
|
|
|
(11
|
)
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
$
|
6
|
|
|
|
$
|
(7
|
)
|
|
|
$
|
(3
|
)
|
|
|
$
|
(7
|
)
|
|
|
$
|
(11
|
)
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
3
|
|
|
|
|
1
|
|
|
|
|
(1
|
)
|
|
|
|
5
|
|
|
|
|
8
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
9
|
|
|
|
$
|
(6
|
)
|
|
|
$
|
(4
|
)
|
|
|
$
|
(2
|
)
|
|
|
$
|
(3
|
)
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Returns28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortress Macro Fund Ltd
|
|
|
|
(4.7
|
%)
|
|
|
|
(6.3
|
%)
|
|
|
|
(7.8
|
%)
|
|
|
|
(0.0
|
%)
|
|
|
|
(17.6
|
%)
|
|
|
|
N/A
|
|
Drawbridge Global Macro Fund Ltd
|
|
|
|
(4.9
|
%)
|
|
|
|
(6.5
|
%)
|
|
|
|
(8.0
|
%)
|
|
|
|
0.0
|
%
|
|
|
|
(18.2
|
%)
|
|
|
|
N/A
|
|
Fortress Convex Asia Fund Ltd
|
|
|
|
(0.6
|
%)
|
|
|
|
(0.7
|
%)
|
|
|
|
3.3
|
%
|
|
|
|
(4.6
|
%)
|
|
|
|
(2.8
|
%)
|
|
|
|
1.5
|
%
|
Fortress Centaurus Global Fund Ltd
|
|
|
|
3.9
|
%
|
|
|
|
(4.1
|
%)
|
|
|
|
(3.0
|
%)
|
|
|
|
5.0
|
%
|
|
|
|
1.4
|
%
|
|
|
|
1.8
|
%
|
Fortress Partners Fund LP29
|
|
|
|
1.2
|
%
|
|
|
|
(1.2
|
%)
|
|
|
|
(4.9
|
%)
|
|
|
|
(0.1
|
%)
|
|
|
|
(5.0
|
%)
|
|
|
|
N/A
|
|
Fortress Partners Offshore Fund LP29
|
|
|
|
0.3
|
%
|
|
|
|
(2.5
|
%)
|
|
|
|
(3.4
|
%)
|
|
|
|
0.5
|
%
|
|
|
|
(5.1
|
%)
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________________________
|
|
22 Combined AUM for Fortress Macro Onshore Fund LP,
Fortress Macro Fund Ltd, Fortress Macro MA1, Fortress Redwood Fund
Ltd and Fortress Macro managed accounts. In 4Q 2015, Fortress closed
the Fortress Macro Funds and related managed accounts.
|
|
23 Combined AUM for Drawbridge Global Macro Fund LP and
Drawbridge Global Macro Intermediate Fund LP.
|
|
24 Combined AUM for Fortress Convex Asia Fund LP,
Fortress Convex Asia Fund Ltd, Fortress Convex Asia Fund PF LP and
Fortress Convex Asia Fund PF Ltd.
|
|
25 Combined AUM for Fortress Centaurus Global Fund LP and
Fortress Centaurus Global Fund Ltd.
|
|
26 Combined AUM for Fortress Partners Fund LP and
Fortress Partners Offshore Fund LP.
|
|
27 In 1Q 2015, the Fortress Asia Macro Funds and related
managed accounts transitioned to Graticule Asset Management on
Fortress's affiliated manager platform.
|
|
28 The performance data contained herein reflects returns
for a "new issue eligible," single investor class as of the close of
business on the last day of the relevant period. Net returns reflect
performance data after taking into account management fees borne by
the Fund and incentive allocations.
|
|
29 The returns for the Fortress Partners Funds include
gains and losses from Special Investments. Investors' specific
performance may vary dependent upon their ownership in one or more
Special Investments.
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 2-g
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
|
Full Year
|
|
Ended March 31,
|
Logan Circle
|
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - Ending Balance
|
|
|
$
|
33,416
|
|
|
$
|
33,564
|
|
|
$
|
33,446
|
|
|
$
|
31,178
|
|
|
$
|
31,178
|
|
|
$
|
32,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Client Flows
|
|
|
$
|
589
|
|
|
$
|
1,056
|
|
|
$
|
101
|
|
|
$
|
(1,867
|
)
|
|
$
|
(121
|
)
|
|
$
|
261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
13
|
|
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
14
|
|
|
$
|
54
|
|
|
$
|
14
|
|
Incentive income
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
13
|
|
|
|
14
|
|
|
|
13
|
|
|
|
14
|
|
|
|
54
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(14
|
)
|
|
|
(14
|
)
|
|
|
(13
|
)
|
|
|
(14
|
)
|
|
|
(55
|
)
|
|
|
(13
|
)
|
Profit sharing compensation expenses
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
(14
|
)
|
|
|
(14
|
)
|
|
|
(13
|
)
|
|
|
(14
|
)
|
|
|
(55
|
)
|
|
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
$
|
(1
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
(1
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 3
Reconciliation of GAAP Net Income (Loss) to Pre-tax
Distributable Earnings and Fund Management DE,
Reconciliation of GAAP Revenues to Segment Revenues and
Reconciliation of GAAP Expenses to Segment Expenses
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
December 31,
|
|
|
Full Year
|
|
|
Ended March 31,
|
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss)
|
|
|
$
|
87
|
|
|
|
$
|
5
|
|
|
|
$
|
(26
|
)
|
|
|
$
|
116
|
|
|
|
$
|
182
|
|
|
|
$
|
(16
|
)
|
Principals' and Others' Interests in (Income) Loss of Consolidated
Subsidiaries
|
|
|
|
(52
|
)
|
|
|
|
(2
|
)
|
|
|
|
12
|
|
|
|
|
(62
|
)
|
|
|
|
(104
|
)
|
|
|
|
7
|
|
Redeemable non-controlling interests in Income (Loss)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
GAAP Net Income (Loss) Attributable to Class A Shareholders
|
|
|
$
|
35
|
|
|
|
$
|
3
|
|
|
|
$
|
(14
|
)
|
|
|
$
|
54
|
|
|
|
$
|
78
|
|
|
|
$
|
(9
|
)
|
Private Equity incentive income
|
|
|
|
3
|
|
|
|
|
19
|
|
|
|
|
21
|
|
|
|
|
(16
|
)
|
|
|
|
27
|
|
|
|
|
23
|
|
Hedge Fund, PCV and Logan Circle incentive income
|
|
|
|
23
|
|
|
|
|
23
|
|
|
|
|
1
|
|
|
|
|
(47
|
)
|
|
|
|
-
|
|
|
|
|
8
|
|
Incentive income received related to exercise of options
|
|
|
|
-
|
|
|
|
|
57
|
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
58
|
|
|
|
|
-
|
|
Reserve for clawback
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Distributions of earnings from equity method investees
|
|
|
|
4
|
|
|
|
|
9
|
|
|
|
|
5
|
|
|
|
|
17
|
|
|
|
|
35
|
|
|
|
|
3
|
|
Losses (earnings) from equity method investees
|
|
|
|
(27
|
)
|
|
|
|
33
|
|
|
|
|
23
|
|
|
|
|
17
|
|
|
|
|
46
|
|
|
|
|
24
|
|
Losses (gains) on options
|
|
|
|
(32
|
)
|
|
|
|
9
|
|
|
|
|
27
|
|
|
|
|
2
|
|
|
|
|
6
|
|
|
|
|
2
|
|
Losses (gains) on other Investments
|
|
|
|
(1
|
)
|
|
|
|
(5
|
)
|
|
|
|
14
|
|
|
|
|
(1
|
)
|
|
|
|
7
|
|
|
|
|
15
|
|
Impairment of investments
|
|
|
|
(3
|
)
|
|
|
|
-
|
|
|
|
|
(1
|
)
|
|
|
|
(2
|
)
|
|
|
|
(6
|
)
|
|
|
|
(2
|
)
|
Adjust income from the receipt of options
|
|
|
|
(4
|
)
|
|
|
|
(21
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(25
|
)
|
|
|
|
-
|
|
Gain on transfer of Graticule
|
|
|
|
(134
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(134
|
)
|
|
|
|
-
|
|
Amortization of intangible assets and impairment of goodwill
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
1
|
|
Employee, Principal and director compensation
|
|
|
|
20
|
|
|
|
|
6
|
|
|
|
|
2
|
|
|
|
|
5
|
|
|
|
|
33
|
|
|
|
|
3
|
|
Adjust non-controlling interests related to Fortress Operating Group
units
|
|
|
|
52
|
|
|
|
|
1
|
|
|
|
|
(12
|
)
|
|
|
|
62
|
|
|
|
|
103
|
|
|
|
|
(8
|
)
|
Tax receivable agreement liability reduction
|
|
|
|
-
|
|
|
|
|
8
|
|
|
|
|
-
|
|
|
|
|
(2
|
)
|
|
|
|
6
|
|
|
|
|
3
|
|
Adjust income taxes and other tax related items
|
|
|
|
18
|
|
|
|
|
(5
|
)
|
|
|
|
3
|
|
|
|
|
39
|
|
|
|
|
55
|
|
|
|
|
1
|
|
Adjust transfer of interest in Graticule
|
|
|
|
101
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
101
|
|
|
|
|
-
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
55
|
|
|
|
$
|
137
|
|
|
|
$
|
69
|
|
|
|
$
|
130
|
|
|
|
$
|
391
|
|
|
|
$
|
64
|
|
Investment Loss (income)
|
|
|
|
(5
|
)
|
|
|
|
(4
|
)
|
|
|
|
(3
|
)
|
|
|
|
(19
|
)
|
|
|
|
(31
|
)
|
|
|
|
(4
|
)
|
Interest Expense
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
4
|
|
|
|
|
3
|
|
Fund Management DE
|
|
|
$
|
51
|
|
|
|
$
|
133
|
|
|
|
$
|
67
|
|
|
|
$
|
113
|
|
|
|
$
|
364
|
|
|
|
$
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Revenues
|
|
|
$
|
227
|
|
|
|
$
|
308
|
|
|
|
$
|
264
|
|
|
|
$
|
415
|
|
|
|
$
|
1,214
|
|
|
|
$
|
232
|
|
Adjust management fees
|
|
|
|
(1
|
)
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1
|
|
Adjust incentive income
|
|
|
|
27
|
|
|
|
|
100
|
|
|
|
|
22
|
|
|
|
|
(59
|
)
|
|
|
|
90
|
|
|
|
|
31
|
|
Adjust income from the receipt of options
|
|
|
|
(4
|
)
|
|
|
|
(21
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(25
|
)
|
|
|
|
-
|
|
Other revenues
|
|
|
|
(59
|
)
|
|
|
|
(61
|
)
|
|
|
|
(65
|
)
|
|
|
|
(76
|
)
|
|
|
|
(261
|
)
|
|
|
|
(59
|
)
|
Segment Revenues
|
|
|
$
|
190
|
|
|
|
$
|
327
|
|
|
|
$
|
221
|
|
|
|
$
|
280
|
|
|
|
$
|
1,018
|
|
|
|
$
|
205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Expenses
|
|
|
$
|
329
|
|
|
|
$
|
258
|
|
|
|
$
|
224
|
|
|
|
$
|
242
|
|
|
|
$
|
1,053
|
|
|
|
$
|
207
|
|
Adjust interest expense
|
|
|
|
(1
|
)
|
|
|
|
-
|
|
|
|
|
(1
|
)
|
|
|
|
(2
|
)
|
|
|
|
(4
|
)
|
|
|
|
(3
|
)
|
Adjust employee, Principal and director compensation
|
|
|
|
(18
|
)
|
|
|
|
(2
|
)
|
|
|
|
(1
|
)
|
|
|
|
(5
|
)
|
|
|
|
(26
|
)
|
|
|
|
(2
|
)
|
Adjust amortization of intangible assets and impairment of goodwill
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
Adjust expense reimbursements from affiliates and non-affiliates
|
|
|
|
(59
|
)
|
|
|
|
(61
|
)
|
|
|
|
(64
|
)
|
|
|
|
(68
|
)
|
|
|
|
(252
|
)
|
|
|
|
(57
|
)
|
Adjust Principal Performance Payments
|
|
|
|
(5
|
)
|
|
|
|
(20
|
)
|
|
|
|
(9
|
)
|
|
|
|
(14
|
)
|
|
|
|
(48
|
)
|
|
|
|
(4
|
)
|
Adjust transfer of interest in Graticule
|
|
|
|
(101
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(101
|
)
|
|
|
|
-
|
|
Segment Expenses
|
|
|
$
|
145
|
|
|
|
$
|
175
|
|
|
|
$
|
149
|
|
|
|
$
|
152
|
|
|
|
$
|
621
|
|
|
|
$
|
140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
''Distributable earnings'' is Fortress's supplemental measure of
operating performance used by management in analyzing segment and
overall results. It reflects the value created which management
considers available for distribution during any period. As compared to
generally accepted accounting principles (''GAAP'') net income,
distributable earnings excludes the effects of unrealized gains (or
losses) on illiquid investments, reflects contingent revenue which has
been received as income to the extent it is not expected to be reversed,
and disregards expenses which do not require an outlay of assets,
whether currently or on an accrued basis. Distributable earnings is
reflected on an unconsolidated and pre-tax basis, and, therefore, the
interests in consolidated subsidiaries related to Fortress Operating
Group units (held by the principals) and income tax expense are added
back in its calculation. Distributable earnings is not a measure of cash
generated by operations which is available for distribution nor should
it be considered in isolation or as an alternative to cash flow or net
income in accordance with GAAP and it is not necessarily indicative of
liquidity or cash available to fund the Company's operations. For a
complete discussion of distributable earnings and its reconciliation to
GAAP, as well as an explanation of the calculation of distributable
earnings impairment, see note 10 to the financial statements included in
the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 2016.
Fortress's management uses distributable earnings:
-
in its determination of periodic distributions to equity holders;
-
in making operating decisions and assessing the performance of each of
the Company's core businesses;
-
for planning purposes, including the preparation of annual operating
budgets; and
-
as a valuation measure in strategic analyses in connection with the
performance of its funds and the performance of its employees.
Growing distributable earnings is a key component to the Company's
business strategy and distributable earnings is the supplemental measure
used by management to evaluate the economic profitability of each of the
Company's businesses and total operations. Therefore, Fortress believes
that it provides useful information to investors in evaluating its
operating performance. Fortress's definition of distributable earnings
is not based on any definition contained in its amended and restated
operating agreement.
"Fund management DE" is equal to pre-tax distributable earnings
excluding our direct investment-related results. Fund management DE is
comprised of "Pre-tax Distributable Earnings" excluding "Investment Loss
(Income)" and "Interest Expense." Fund management DE and its components
are used by management to analyze and measure the performance of our
investment management business on a stand-alone basis. Fortress defines
segment operating margin to be equal to fund management DE divided by
segment revenues. The Company believes that it is useful to provide
investors with the opportunity to review our investment management
business using the same metrics. Fund management DE and its components
are subject to the same limitations as pre-tax distributable earnings,
as described above.
|
|
Fortress Investment Group LLC
Exhibit 4
Reconciliation of Weighted Average Class A Shares Outstanding
(Used for Basic EPS) to Weighted Average Dividend Paying Shares
and Units Outstanding (Used for DEPS)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
Weighted Average Class A Shares Outstanding (Used for Basic EPS)
|
|
|
220,847,407
|
|
|
|
215,785,776
|
|
|
|
|
|
|
|
|
Weighted average fully vested restricted Class A share units with
dividend equivalent rights
|
|
|
(1,676,531
|
)
|
|
|
(7,231,768
|
)
|
Weighted average restricted Class A shares
|
|
|
(769,429
|
)
|
|
|
(840,658
|
)
|
|
|
|
|
|
|
|
Weighted Average Class A Shares Outstanding
|
|
|
218,401,447
|
|
|
|
207,713,350
|
|
|
|
|
|
|
|
|
Weighted average restricted Class A shares30
|
|
|
769,429
|
|
|
|
840,658
|
|
Weighted average fully vested restricted Class A share units which
are entitled to dividend equivalent payments
|
|
|
1,676,531
|
|
|
|
7,231,768
|
|
Weighted average unvested restricted Class A share units which are
entitled to dividend equivalent payments
|
|
|
7,817,892
|
|
|
|
8,347,402
|
|
Weighted average Fortress Operating Group units
|
|
|
169,514,478
|
|
|
|
226,331,513
|
|
|
|
|
|
|
|
|
Weighted Average Class A Shares Outstanding (Used for DEPS)
|
|
|
398,179,777
|
|
|
|
450,464,691
|
|
Weighted average vested and unvested restricted Class A share units
which are not entitled to dividend equivalent payments
|
|
|
8,755,877
|
|
|
|
11,703,251
|
|
Weighted Average Fully Diluted Shares and Units Outstanding
(Used for Diluted DEPS)
|
|
|
406,935,654
|
|
|
|
462,167,942
|
|
|
|
|
|
|
|
|
"Dividend paying shares and units" represents the number of shares and
units outstanding at the end of the period which were entitled to
receive dividends or related distributions. The Company believes it is
useful for investors in computing the aggregate amount of cash required
to make a current per share distribution of a given amount per share. It
excludes certain potentially dilutive equity instruments, primarily
non-dividend paying restricted Class A share units, and, therefore, is
limited in its usefulness in computing per share amounts. Accordingly,
dividend paying shares and units should be considered only as a
supplement and not an alternative to GAAP basic and diluted shares
outstanding. The Company's calculation of dividend paying shares and
units may be different from the calculation used by other companies and,
therefore, comparability may be limited.
|
____________________________________
|
|
30 Includes both fully vested and unvested restricted
Class A shares.
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 5
Reconciliation of GAAP Book Value Per Share to Net Cash and
Investments Per Share
(dollars and shares in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2016
|
|
|
As of December 31, 2015
|
|
|
|
|
GAAP
|
|
|
Net Cash and
|
|
|
GAAP
|
|
|
Net Cash and
|
|
|
|
|
Book Value
|
|
|
Investments
|
|
|
Book Value
|
|
|
Investments
|
Cash and Cash equivalents
|
|
|
|
$
|
225,553
|
|
|
$
|
225,553
|
|
|
$
|
339,842
|
|
|
$
|
339,842
|
Investments
|
|
|
|
|
977,996
|
|
|
|
977,996
|
|
|
|
1,055,789
|
|
|
|
1,055,789
|
Investments in options31
|
|
|
|
|
27,932
|
|
|
|
-
|
|
|
|
30,427
|
|
|
|
-
|
Due from Affiliates
|
|
|
|
|
216,646
|
|
|
|
-
|
|
|
|
273,811
|
|
|
|
-
|
Deferred Tax Asset, net
|
|
|
|
|
418,773
|
|
|
|
-
|
|
|
|
427,102
|
|
|
|
-
|
Other Assets
|
|
|
|
|
141,389
|
|
|
|
-
|
|
|
|
148,310
|
|
|
|
-
|
Total Assets
|
|
|
|
|
2,008,289
|
|
|
|
1,203,549
|
|
|
|
2,275,281
|
|
|
|
1,395,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Obligations Payable
|
|
|
|
$
|
260,677
|
|
|
$
|
260,677
|
|
|
$
|
230,677
|
|
|
$
|
230,677
|
Accrued Compensation and Benefits
|
|
|
|
|
116,015
|
|
|
|
-
|
|
|
|
318,750
|
|
|
|
-
|
Due to Affiliates
|
|
|
|
|
370,061
|
|
|
|
-
|
|
|
|
365,218
|
|
|
|
-
|
Deferred Incentive Income
|
|
|
|
|
290,744
|
|
|
|
-
|
|
|
|
332,329
|
|
|
|
-
|
Other Liabilities
|
|
|
|
|
116,885
|
|
|
|
-
|
|
|
|
86,503
|
|
|
|
-
|
Total Liabilities
|
|
|
|
|
1,154,382
|
|
|
|
260,677
|
|
|
|
1,333,477
|
|
|
|
230,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
$
|
853,907
|
|
|
$
|
942,872
|
|
|
$
|
941,804
|
|
|
$
|
1,164,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Paying
|
|
|
|
|
|
Dividend Paying
|
|
|
|
|
Shares
|
|
|
Shares and Units
|
|
|
Shares
|
|
|
Shares and Units
|
|
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Outstanding
|
Class A Shares
|
|
|
|
|
215,614
|
|
|
|
215,614
|
|
|
|
216,061
|
|
|
|
216,061
|
Restricted Class A Shares
|
|
|
|
|
771
|
|
|
|
771
|
|
|
|
729
|
|
|
|
729
|
Fortress Operating Group Units
|
|
|
|
|
169,514
|
|
|
|
169,514
|
|
|
|
169,515
|
|
|
|
169,515
|
Fully Vested Class A Shares - Dividend Paying
|
|
|
|
|
-
|
|
|
|
303
|
|
|
|
-
|
|
|
|
1,361
|
Unvested Class A Shares - Dividend Paying
|
|
|
|
|
-
|
|
|
|
8,064
|
|
|
|
-
|
|
|
|
9,175
|
Shares Outstanding
|
|
|
|
|
385,899
|
|
|
|
394,266
|
|
|
|
386,305
|
|
|
|
396,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
|
|
|
|
$
|
2.21
|
|
|
$
|
2.39
|
|
|
$
|
2.44
|
|
|
$
|
2.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and investments represents cash and cash equivalents plus
investments less debt outstanding. The Company believes that net cash
and investments is a useful supplemental measure because it provides
investors with information regarding the Company's net investment
assets. Net cash and investments excludes certain assets (investments in
options, due from affiliates, deferred tax asset, other assets) and
liabilities (due to affiliates, accrued compensation and benefits,
deferred incentive income and other liabilities) and its utility as a
measure of financial position is limited. Accordingly, net cash and
investments should be considered only as a supplement and not an
alternative to GAAP book value as a measure of the Company's financial
position. The Company's calculation of net cash and investments may be
different from the calculation used by other companies and, therefore,
comparability may be limited.
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31 The intrinsic value of options in equity method
investees totaled $17 million at quarter end and is included in our
undistributed, unrecognized incentive income. This value represents
incentive income that would have been recorded in Distributable
Earnings if Fortress had exercised all of its in-the-money options
it holds in the Permanent Capital Vehicles and sold all of the
resulting shares at their March 31, 2016 closing price and differs
from the fair value derived from option pricing models included in
the table above.
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