Oppenheimer Sees Some Bright Spots In Tough Quarter For Fortress (FIG)
Oppenheimer & Co. said it sees positives in the earnings report released yesterday from private equity firm Fortress Investment Group (NYSE: FIG).
There were a multitude of factors that gave hope to Oppenheimer when it looked through Fortress's report. It said the credit funds were largely the reason behind
the good news, as these funds were all above their high water marks. Oppenheimer estimates that these funds will continue to generate performance fees in the latter part of the year and through 2012.
In the report Oppeneheimer notes, "In a quarter in which the S&P 500 fell 12%, Fortress had some bright spots to point to. In particular, performance fees of $47M drove distributable income of $0.14 per share, handily beating our $0.11 estimate and consensus of $0.08. In addition, the company closed its previously announced acquisition of Logan Circle, a traditional fixed-income manager, and announced a total of $1.9B in new third-party capital raised. On the downside, the outflows from the liquid hedge funds continued, with another $0.3B in redemptions although there were also a similar amount of inflows.
On balance, it was a very respectable quarter given the environment."
Oppenheimer said it sees Fortress as a speculative stock since the shares are currently trading under $5. Shares are currently at $4.14, up 5 cents in Friday trading.
