Fortress Investment Group reported $72 billion in assets under management as of June 30, a 3% increase from three months earlier and up 12.8% from the year before, the company said in its second-quarter earnings release on Thursday.
The increase came as a result of Fortress raising $3 billion of capital and equity that the company added directly to assets under management, as well as $1.1 billion in net client inflows for subsidiary Logan Circle Partners, and an $800 million increase in invested capital.
Those gains were partially offset by $1.5 billion in market-driven valuation losses, $400 million in liquid hedge fund redemptions, $300 million in capital distributions, and $200 million each in payments to credit hedge fund investors and capital reset adjustments.
Liquid hedge funds AUM dropped to $7.4 billion as of June 30, a 5.9% drop from the previous quarter and the only Fortress business to report a loss for the second quarter. The liquid markets unit houses Fortress' macro hedge fund business, which the company announced on Thursday it plans to shrink.
“We're right-sizing the business, scaling it down to an appropriate size for one risk-taker,” said Michael Novogratz, principal, director and chief investment officer of the macro fund, on a conference call with analysts and investors.”
Mr. Novogratz had announced in February the decision to abandon a dedicated long/short equity program within the macro fund.
Logan Circle Partners' assets under management remained flat from the previous quarter at $33.6 billion as of June 30, but AUM increased 15.2% from 12 months earlier.
Logan Circle accounted for 46.6% of Fortress' total as of June 30. Private equity funds made up 13.3%; credit private equity funds, 11.5%; liquid hedge funds, 10.3%; permanent capital vehicles, 9.7%; and credit hedge funds, the remainder.
Bloomberg contributed to this story.