Fortress Investment Group is one of New York City’s finest alternative investment management firms. The company was founded in 1998 as a joint venture between Randy Nardone, Wes Edens, and Rob Kauffman; Randy was a lawyer by trade before the incorporation of Fortress Investment Group, whereas Mr. Edens worked in financial services and Rob Kauffman was an entrepreneur best known for being a successful professional racecar driver.
Currently, Fortress Investment Group manages roughly $40 billion in assets that belong to its clients, of which there are about 1,750. Most of Fortress Investment Group’s clients are corporate entities, though some big-name private investors have the company manage their assets, as well.
The world is full of big businesses; SoftBank, based in Japan, is another large business, though it doesn’t operate in the field of financial services like aforementioned counterpart does.
SoftBank is one of the biggest companies in the world. In its most recent fiscal reporting year, the company netted $1.02 trillion in net income from $9.16 in revenue. Although SoftBank usually purchases companies in the world of technology and the Internet, it purchased Fortress Investment Group for $3.3 billion just over one years ago.
One might wonder why SoftBank, one of the world’s most prominent business conglomerates, decided to venture outside of its comfort zone to gobble up the ownership interest of Fortress Investment Group.
Why did SoftBank look to Fortress?
Simply put, Fortress was a safe investment for the company thanks to its consistent results, something that not every alternative asset management firm can manage to pull. SoftBank to Buy Fortress Investment Group for $3.3 Billion.
SoftBank has its hands in the operation of most of its other 400 businesses under ownership. However, SoftBank won’t be advising Fortress on what its employees should invest in or dispose of; rather, Fortress will operate independently – it’s been operating independently ever since it was founded over 20 years ago – making costs of ownership low for SoftBank.
Further, SoftBank doesn’t have to subject itself to the oversight maintained by the United States Committee on Foreign Investments. This will help SoftBank keep its costs of ownership low and returns high.