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MONEY MANAGEMENT

Fortress Investment Group’s assets inch up for quarter, dip for year

Fortress Investment Group reported $70.16 billion in assets under management as of March 31, up 0.8% from the previous quarter and down 0.7% from a year earlier, the firm's earnings release showed.

During the first quarter, Fortress raised a total of $1.6 billion in capital. The firm had $7.5 billion in dry powder as of March 31.

Fortress' private equity and permanent capital AUM totaled $14.51 billion as of March 31, up 7.5% from three months earlier and up 4% from a year earlier. The company's credit business AUM was $17.73 billion as of March 31, down 2.1% from Dec. 31 and down 5.1% from March 31, 2016. Liquid markets AUM totaled $4.2 billion, down 8.5% from the end of the previous quarter and down 19.2% from the end of the year-earlier quarter. Logan Circle Partners, Fortress' fixed-income business, reported $33.72 billion in AUM as of March 31, up 0.8% from three months earlier, and up 2.8% from a year earlier.

Fortress reported a GAAP net loss of $7 million for the quarter, compared to $165 million in net income for the fourth quarter and a net loss of $16 million for the first quarter of 2016.

Revenues were $232 million for the quarter compared to $438 million for the previous quarter and $232 million for the year-earlier quarter. Expenses were $241 million for the first quarter, compared to $280 million for the fourth quarter and $207 million for the first quarter of 2016. Fortress had “other income” of $1 million for the quarter, compared to $23 million for the previous quarter and an “other” loss of $40 million for the year-earlier quarter.

Management fees were $133 million for the first quarter, flat from the prior quarter and down from $141 million in first quarter of 2016. Fortress attributed the decrease in fees year-over-year to lower management fees from liquid hedge funds and private equity funds, which were partially offset by higher fees from permanent capital vehicles.

During the first quarter, on Feb. 14, Fortress announced it is being acquired by SoftBank Group Corp. in an all-cash transaction. The deal is expected to close in the second half of 2017. Fortress is expected to operate as an independent business within SoftBank.