Fortress plunges 52% in first quarter

Four months after becoming the first publicly traded hedge fund manager, Fortress Investment Group LLC posted a 52% drop in first quarter net income for the quarter ended March 31, due to a $71.8 million reorganization expense.
The New York-based company specializing in private-equity funds, hedge funds and publicly traded alternative investments reported net income of $62.1 million, compared to $130.1 million in the year-ago period.
Revenues grew 13% to $415.3 million, compared to $370 million in the first quarter of 2006.
Analysts surveyed by Thomson Financial had predicted earnings of 27 cents per share on revenue of $353.3 million.
The liquid hedge fund business brought in $33 million of pre-tax distributable earnings, off 54% compared to $71 million for the quarter ended March 31.
Assets under management increased 72% to $35.9 billion, compared to $20.9 billion during the first quarter of 2006.
Management fee paying assets under management rose 62% to $23.4 billion, compared to $14.5 billion during the year-ago period.
Fortress last week agreed to acquire Florida East Coast Industries Inc., a real-estate holding company for $3.5 billion (InvestmentNews, May 9) .