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Fortress Investment Group’s AUM climbs 3% in quarter, year

Fortress Investment Group's assets under management increased 3% to $72.4 billion for both the quarter and the year ended June 30, the firm's earnings report released Thursday showed.

As of June 30, approximately 87% of alternative investment assets were managed in vehicles with longer-term lockups. Uncalled capital, or dry powder, across strategies totaled $7.5 billion, the report showed.

During the quarter, AUM growth was primarily driven by $1.4 billion in investment gains, $700 million of net inflows and $500 million of invested capital across the firm's illiquid strategies.

In the three months ended June 30, the liquid hedge fund family had the highest asset growth — 9% to $4.6 billion — followed by a 5% increase in AUM to $35.5 billion run in traditional money management strategies by the firm's Logan Circle Partners business. Private equity and permanent capital AUM grew by 1% to $14.7 billion in the quarter while credit fund assets remained flat.

For the year ended June 30, assets managed in private equity/permanent capital strategies showed the most growth — 11% — followed by a 4% increase in AUM for Logan Circle. Hedge fund assets decreased 1% and for credit-oriented funds saw a 3% decline.

The earnings statement said shareholders approved the proposal to merge Fortress with Softbank Group Corp. by a 99.7% margin during a July 12 meeting. The deal is expected to close in the second half of 2017.

The report also noted that Fortress agreed to sell Logan Circle Partners to MetLife for $250 million after the quarter ended.

Fortress' revenues totaled $247 million in the quarter compared to $232 million in both the quarter ended March 31 and the three months ended June 30, 2016.

The firm's GAAP net income totaled $32 million in the three months ended June 30. By contrast, it experienced a net loss of $7 million in the first quarter of 2017 and a $14 million loss in the second quarter of 2016.