Fortress Investment Group has been in business for over two decades and was founded by former Goldman Sachs employees. The company is located in New York. The company became a publicly traded entity on February 9th, 2007, with its stock trading under the symbol FIG. Fortress Investment Group had a rough 2016 after it came to light that one of their funds performed poorly due to significant positions being held in Valeant Pharmaceuticals International Inc. and other individual holdings such as Platform Specialty Products Corp.
In September 2017, some shareholders proposed that the company sell their entire stake in Softbank’s Vision Fund for $8 billion, which would have been beneficial to both companies. However, this proposal failed because there were not enough votes needed from shareholders, but this did not positively affect the company’s stock price.
In May 2017, Softbank expressed an interest in purchasing from its shareholders. The offer from Softbank was around 3.3 billion dollars at $8 a share, but shares did not move much due to this buyout possibility. In June of 2017, it came to light that there would be difficulties in the sale because Softbank owns a stake in other private equity companies that compete with Fortress Investment Group, and they stand to lose a lot if this deal goes through. Some investors may have also been worried about what could happen after the buyout because competitors such as Blackstone were interested in making their acquisitions afterward.
In February 2018, the company’s Vice President, Peter Lammons, left to join WeWork. This departure was a bit surprising considering the circumstances surrounding the company and its future. Many pundits felt that this move would not bode well because it lacked vision and direction.
In March 2018, CEO Wesley Edens announced that he would be increasing his stake in the company from 52% to 55%. He did not provide any further details on why he chose to do this or what he plans on doing with his increased percentage of shares and voting power at this time.
The challenges for this New York company are to find ways to restructure their balance sheet after multiple poor-performing funds during 2016 took a toll on equity within the company. They also need to find ways to be relevant in the current market without losing their identity, which could prove difficult considering the business climate.
The sale of Fortress Investment Group is still pending at this time, and it is unclear when or if they will ever sell to Softbank or anyone else for that matter. Several other private equity firms are interested in purchasing Fortress Investment Group, making it more difficult for Softbank to acquire the company. It is also possible that the company will remain independent and not sell if they can get their financials back in order by restructuring some of their failed funds and getting shareholder support for this transaction.