Entrepreneur Investment

SoftBank Is Making Some Moves to Sell Fortress Investment Group

The New York Fortress has been in the spotlight amid a series of deals in the industry in the last few months. Fortress declined to comment, and SoftBank didn’t respond to requests for comment. The Firm was founded by veterans and has become a great asset manager globally.

What implications would a sale have for Fortress Investment Group?

While SoftBank is looking at ways to unbundle and separate Fortress from its Vision Fund, its ultimate intention is to keep Fortress, people familiar with the matter have said in the past.

Concerns over Fortress’s structure arose as SoftBank worked to complete its biggest-ever deal last year: the $93 billion takeovers of U.S. wireless operator Sprint Corp. After the deal, Fortress Managing Partner Will Hessham, who had played a key role in advising SoftBank on the Sprint acquisition, left the company.

What would happen for a sale breakthrough?

For the most part, Fortress’s operating business would stay intact. Fortress Investment Group would continue to manage a portfolio of hedge, credit, real estate, and private equity funds for its retail and institutional clients. In addition, the business would continue to run the Liquid Alternative Products Group, a hedge fund program set up by Fortress.

SoftBank would also own a 30 percent equity stake in Fortress Investment Group and retain its entire stake. But the New York Fortress could receive a significant premium should the Firm go public, they said.

What factors are driving the SoftBank decision?

“Our interest in the business is driven by the experience of the investment team, which is very strong in private markets, in credit, and the opportunity to better serve our customers in global markets and regions,” a SoftBank spokesman said.

The statement implies that the company may invest in Fortress Investment Group again after acquiring it in 2013. SoftBank said in May that it would invest a total of $25 billion in the Vision Fund, which has become the world’s largest private-equity fund.

The spokesman declined to comment on the SoftBank board’s discussions and said there had been no changes in Fortress’s management team. Fortress CEO Randy Nardone said he would step down this year. The spokesman said the company’s senior management remains in place.