SoftBank to buy Fortress Investment Group for US$3.3b

[NEW YORK] SoftBank Group Corp is buying alternative-asset manager Fortress Investment Group LLC for US$3.3 billion to operate alongside the Japanese company's soon-to-be-established technology investment fund.

Japan's SoftBank will pay US$8.08 a share for New York-based Fortress, a 39 per cent premium to the company's Feb 13 closing price, according to a statement Tuesday. Fortress co-founders Pete Briger, Wes Edens and Randy Nardone have agreed to continue leading the business, which will remain based in New York and operate independently within SoftBank, according to the statement.

SoftBank's founder Masayoshi Son is in the process of creating a US$100 billion Vision Fund with Saudi Arabia that would make the Japanese billionaire one of the world's biggest technology investors. The Fortress deal will be separate from that vehicle and is aimed at bringing investment talent in-house, according to a SoftBank spokeswoman. The acquisition, which is subject to approval by Fortress shareholders as well as regulators, is expected to close in the second half.

"Fortress's excellent track record speaks for itself, and we look forward to benefiting from its leadership, broad-based expertise and world-class investment platform," Masayoshi Son, SoftBank's chairman and chief executive officer, said in the statement.

Shares of Fortress closed up 6.5 per cent at US$6.21 on Tuesday, giving the New York-based company a market value of about US$2.4 billion. SoftBank rose 1 per cent in Tokyo on Wednesday.

Fortress was founded as a private-equity firm in 1998 byMr Edens, Mr Nardone and Robert Kauffman, who came from Swiss bank UBS AG and New York-based BlackRock Financial Management Inc.

Fortress's stock has slumped by nearly two-thirds since its initial public offering in early 2007, when it became the first private equity firms to sell its shares to the public. The lacklustre performance has come despite a more than doubling of assets managed by the firm as dwindling performance by investment managers in the fallout of the global financial crisis has hit profitability.

Fortress managed US$70.1 billion in credit assets, private equity holdings, hedge funds and fixed-income investments as of Sept 30.

BLOOMBERG