Fortress Wont Pay Dividend, Seeks to Invest Capital

Date: Friday, September 26, 2008
Author: Saijel Kishan, Bloomberg

Fortress Investment Group LLC, a New York-based manager of private-equity and hedge funds, won't pay a third-quarter dividend to shareholders, saying the money can be better spent by investing in financial companies.

``Given the significant dislocations in the world's financial markets, we see tremendous opportunities for the firm to invest capital,'' Fortress Chief Executive Officer Wesley Edens said in a statement today. ``We are focused on potential investments in banks, insurance companies and other asset- management businesses.''

Fortress has risen 38 percent in the past two weeks in New York trading as investors anticipate private-equity and hedge- fund firms will profit from financial turmoil by snapping up companies and assets at distressed prices. Fortress rose 51 cents, or 3.9 percent, to $13.50 in New York Stock Exchange composite trading today.

Private-equity firms are shifting from the large leveraged buyouts that dominated Wall Street during 2006 and 2007, raising funds to snap up distressed debt and mortgage securities. Fortress oversees about $35 billion.

Fortress had paid a dividend of 22.5 cents a share for the past five quarters. The payout for the second quarter was $91.5 million.

To contact the reporter on this story: Saijel Kishan in New York at skishan@bloomberg.net