SoftBank and Fortress share sort of a similar background where both have always sought for new areas to venture into as they continually seek to diversify their portfolio. Their fates were, however, brought together when a deal to acquire the Fortress Investment Group was approved. The deal was worth an estimated 3.3 billion dollars or an average of 8.08 dollars per share. This was a 39% premium on the existing share price at the time the deal went through. SoftBank had promised to invest more than fifty billion dollars in the United States. For them, Fortress was just the first step, but one of the most significant.
The Fortress Investment Group is an alternative management company that has more than forty billion worth of assets under management. These assets are distributed in diverse areas, and as such, the acquisition by SoftBank gave them an opportunity to own a piece of the same. Through the permanent Investment Vehicles that Fortress uses to generate the bulk of its revenue, it has been able to capture the real estate, media, Transport & infrastructure as well as other sectors. These areas are not only lucrative today, but hold a lot of potential in the future. The Fortress Investment Group was founded in 1998 by three partners. They would go on to grow their initial assets under management sixfold in less than five years, and by 2002 they were expanding the number of divisions within the group. They were looking to acquire assets through credit, and this saw them bring in a new team led by Peter Briger to establish the same. As the years went by it became a strong part of the brand. Today Fortress has managed to become an industry leader when it comes to distressed asset acquisition and management.
SoftBank will now be responsible for injecting more capital directly into Fortress. This was a responsibility they were ready to take on despite agreeing to leave the day to day operations management to the existing team as per the agreement made before the acquisition was finalized. This meant that the founding members who are still active within the group would continue running its operations and at the same time inject back profits to enhance the group’s growth.
The Fortress Investment Group is no longer listed on the NYSE and its newly acquired private status is bound to give it more wriggle room as it continues its expansion into new areas.