UPDATE: Goldman Sachs Raises Its PT, Reiterates Buy On Fortress Investment Group Following Earnings Beat
March 02, 2011 10:56 AM
Fortress Investment Group (NYSE: FIG) reported DEPS of $0.20 versus Goldman's $0.13 estimate, and the Street's $0.14. Pre-tax distributable earnings came in at $125 mn, ahead of Goldman's $79 mn estimate. The upside was driven by better-than-expected incentive income of $145 mn, a delta of $0.08 to after-tax DEPS, coming primarily from the PE and credit HF segments.
4Q10 was a strong quarter, as FIG generated performance fees across a number of strategies including private equity. Importantly, 2011 is off to a solid start, with FIG's public equity portfolio companies up in excess of 20%, suggesting further recovery in FIG's PE portfolio and another $3.5 bn “shadow” AuM set to earn management fees once drawn.
FIG continues to raise new funds, driving higher management fee earnings and the firm continues to move closer to re-instating its distribution. In Goldman's view, FIG shares currently ascribe little value to performance fees, despite the firm's improving distributable earnings profile.
Goldman Sachs raised its PT from $7 to $7.50 and reiterates its Buy on FIG
FIG is trading lower at $6.21
