Fortress Investment Group reported $54.6 billion under management as of June 30, a 2% drop from March 31 but a 14% increase from a year earlier, according to the alternatives investment firm's second-quarter results released Thursday.
The drop in AUM was due in part to a $1.5 billion decline resulting from the recapitalization of its real estate investment trust, Eurocastle Investment Ltd.; $200 million in hedge fund redemptions; $300 million in payments to credit hedge fund investors from redeeming capital accounts; and $590 million in capital distributions to investors. This was partially offset by a $1.2 billion increase in capital and equity.
Fortress also suffered a GAAP net loss of $2 million for the quarter ended June 30, down from a $67 million gain in the first quarter and a $14 million gain for the year-earlier quarter.
According to its earnings release, Fortress considers pre-tax distributable earnings, which is based on realized earnings, to be a more accurate measure of the firm's growth than GAAP. Fortress' pre-tax distributable earnings — or realized earnings of $148 million — for the second quarter were up 196% of $50 million in the second quarter of 2012.
