Zachary Houle

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How Fortress Investment Group Innovated the Private Equity World

There are many companies who hope to make a big impact in the world of finance. However, there is only one company that can claim to innovate the entire world of private equity for the last two decades. That company, Fortress Investment Group, has emerged as one of the biggest players in the private equity world.

Since its founding in 1998, Fortress Investment Group has been making waves across Wall Street. The company was founded by partners Rob Kauffman, Wesley R. Edens, and Randal Nardone. Today, all three principals are still involved with the firm at the company’s flagship offices in New York City.

While Fortress was founded as a private equity firm, it soon expanded into hedge funds, real estate investments and debt security investments. For the first seven years of its existence, Fortress Investment Group was able to net an average of 39.7% from its private equity holdings. The success of the company led to Fortress going public on February 9, 2007. It would be the first major private equity group to go public on the New York Stock Exchange.

The firm weathered the financial crash of 2008 and continued to expand. In 2014, the company was named “Hedge Fund of the Year” by Institutional Investor. Fortress was also named “Management Firm of the Year” by HFM Week. As the company was winning awards and making major acquisitions, some speculated that Fortress Investment Group itself would soon find a buyer.

That buyer would emerge in 2017 when SoftBank Group put in a $3.3 billion dollar bid for the company. Fortress would accept the offer, closing the deal in the last week of December of 2017. Today, Fortress manages over $70 billion dollars in assets with over 2,500 full-time employees on staff.

Fortress currently operates a number of subsidiaries including Nationstar Mortgage, Intrawest, Railroad Acquisition Holdings, and New Media Investment Group. The company’s net revenue was $1.1 billion dollars in 2016 with a net income of $180 million. As Fortress continues to expand, the company will look for new acquisition and investment opportunities in the global market.