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Fortress Investment Group LLC (NYSE:FIG) just had a profitable third quarter, the profits rose by 49 percent and beat the Street’s expectations. The net profits (before taxes) amounted to $64 million or an EPS of 12 cents for the last quarter, a significant increase from net earnings of $43 million (EPS 8 cents) that was reported in the third quarter of 2011. Segment revenue for the quarter was $181 million. The alternative asset manager reported an AUM of $51.5 billion, this equals to an addition of $3.5 billion to the assets for the second quarter of 2012. Total assets rose 18 percent when compared to the corresponding quarter of 2011.

Analysts at Thomson Reuters were expecting earnings of 11 cents on each dividend paying share and segment revenue of $180 million.

Fortress’ flagship funds, Main Credit and Macro, gained 2.9 percent and 5.1 percent as of September 30. According to the CEO, Randal Nardone, Fortress Investment Group LLC (NYSE:FIG)’s outlook and financial strength are better than ever. The fund also paid off its entire corporate debt, which amounted to $181 million in the last quarter.

Another hedge fund, Greenlight Capital Re, Ltd. (NASDAQ:GLRE), released its third quarter earnings recently. The fund’s Chairman, David Einhorn’s history of acing every investment went off track in the quarterly returns reported for the third quarter. Greenlight Capital incurred losses from underwriting Commercial Motor Liabilities, a  business initiated back in 2008 and expanded in 2010. But as the hedging approach goes, the firm was able to neutralize the damage through other investments of Greenlight Re. The losses from underwriting came around $44 million, but the business reported a positive return of 8.8 percent for the third quarter, while the net investment income equaled $96.5 million for Q3. Greenlight Capital Re, Ltd. (NASDAQ:GLRE) is up 12.1 percent year to date, and net income for the year so far is $131.2 million.

The fund’s diluted earnings per share were 123 cents for the third quarter, which is an improvement from the net loss per share of 12 cents for the corresponding quarter of 2011.

Commenting on the reasons behind the  failed investment, Bart Hedges, CEO of Greenlight Capital Re, Ltd. (NASDAQ:GLRE), said that the pricing in the trucking business did not improve as expected and the firm dissolved the underwriting position when new claims were hinting towards generating losses. The fund was profitable in long investments, like, Apple Inc. (NASDAQ:AAPL), Arkema SA (EPA:AKE) (PINK:ARKAY), Gold, and Seagate Technology PLC (NASDAQ:STX). The fund lost only 1 percent in the short portfolio. Greenlight’s portfolio is now 26 percent net long and 70 percent gross short.

Despite the criticism that hedge funds get from analysts on their venture in reinsurance, one has to see the upsides as well. For an ordinary investor, the losses would have been enough to offset any profits, but in the case of hedge funds there is always the opportunity to hedge your losses against other positions.