Private equity firm Fortress raises a $5-billion war
31 Jul 2007
New York-based private equity and hedge fund operator Fortress Investment Group has raised $5 billion from third parties for its latest private equity funds, Fortress Investment Fund V and Fortress Co-investment Fund V. It expects the firm, affiliates and employees to contribute an additional $1 billion to the main fund, for which it has already raised $2.84 billion in third-party commitments.
The new vehicles will make controlling investments in asset-based businesses and asset portfolios, mostly in North America and Western Europe. Fortress came out earlier this year with a high-profile initial public offering (IPO) - the first-ever public debut for a US-based pure private equity and hedge fund manager.
Fortress'' rivals are preparing to raise huge new funds too. Apollo Management plans to raise at least $15 billion, while Boston''s Bain Capital and the Carlyle Group are also into major fundraising; Carlyle''s latest fundapparently has a target of $15 billion with a $17 billion cap.
Fortress is taking Jacksonville, Florida-based railroad and commercial real estate company Florida East Coast Industries Inc private. The firm closed the $2.2 billion deal on 26 July, having secured shareholder approval on Wednesday. Fortress has made a $275 million co-investment commitment as part of the FEC acquisition.
Last
week, Fortress closed a $2.4 billion leveraged buyout of Princeton, New Jersey-based
shipping container rental company Interpool Inc. Earlier, it tied up with Centerbridge
Partners to take casino and horse racetrack operator Penn National Gaming
Inc private for $8.9 billion. As of 31 March, Fortress had almost $36 billion
in assets under management. Fortress'' shares were down 5 per cent at $19.62 on
26 July, when the news broke. The firm went public at $18.50 a share in February
and saw its shares soar to $35 on the very first day of trading.
