Fortress forgoes dividend to target financial services

Founder Wesley Edens has said the firm will not pay a third quarter dividend in order to retain capital for ‘tremendous opportunities’ in banks, insurance companies and other asset management businesses.

Publicly listed Fortress Investment Group will not pay a dividend in the third quarter in an attempt to shore up its capital base and pursue opportunities in the financial services sector.

“Given the significant dislocations in the world’s financial markets, we see tremendous opportunities for the firm to invest capital and to grow and diversify our business – in particular, we are focused on potential investments in bank, insurance companies and other asset management businesses,” firm founder Wesley Edens said in a statement. “Retaining capital inside the firm increases our ability to act on these opportunities and is the right thing for us to do.”

Fortress' fundraising has slowed significantly since last

Wes Edens: eying

financial services

year.

New capital devoted to Fortress’ private equity franchise dropped 71 percent for the 12-month period ending on 30 July compared with the same period last year, although the firm grew its total assets under management by 23 percent in that time.   

Across all of Fortress’ investment vehicles, the firm raised approximately $2.2 billion (€1.5 billion) in the three months ending 30 June, down from $5.9 billion in the same period in 2007.

Earlier this year, Fortress held a roughly $500 million first close on its sixth core private equity fund. Fortress did not disclose the target for the vehicle, but its fifth buyout fund closed on $5 billion last year.  

The firm also has raised $1.9 billion for a new private equity style-fund targeting $2.5 billion for investments in “credit sensitive assets”.