Fortress Investment Group LLC (NYSE:FIG) is the next alternative investment firm to post solid profitability. Earlier, KKR & Co. L.P. (NYSE:KKR), The Blackstone Group L.P. (NYSE:BX) and Apollo Global Management LLC (NYSE:APO) announced strong earnings in the last three months of 2012.
The fourth quarter profits of Fortress rose 114 percent to $107 million or 20 cents per dividend-paying share from $50 million in the same period a year ago. Analysts were expecting 14 cents per share in earnings.
For 2012, earnings rose 15 percent from $242 million to $278 million. Fortress Investment Group LLC (NYSE:FIG) reports profits as pretax distributable earnings, a measure used by private equity firms to track payouts. Using GAAP, Fortress’ fourth quarter profits came in at $222 million, from a loss of $234 million in the fourth quarter of 2011.
Total revenues for the fourth quarter rose from $276.3 million a year earlier to $417.6 million. The New York-based firm’s assets under management increased to $53.4 billion at the end of December 2012 from $43.7 billion by the end of 2011. The company had $51.5 billion AUM at the end of Q3 2012.
2012 proved to be a good year for private equity firms and hedge funds that have benefited from an abundance of cheap financing and rising markets. Fortress Investment Group runs both private equity funds and hedge funds. All the business units of Fortress reported gains during the quarter.
The mainstream hedge funds swung to profitability, earning $30 million on improved performance. The macro hedge funds gained 6 percent in the fourth quarter and 17.8 percent during the full year. The firm’s Asia macro funds posted a gain of 9.5 percent for the quarter and 21.2 percent for the full year. The debt investment unit earned $46 million in profits, up 59 percent from the last year’s fourth quarter. The private equity funds posted a 3.9 percent rise in their holdings, earnings a profit of $31 million.
Fortress Investment Group LLC (NYSE:FIG) also announced a quarterly dividend of 6 cents per share. Losses at the company’s asset management unit narrowed to $3 million for the quarter due to rise in management fees. Management fees increased to $131 million from $121 million in the fourth quarter of 2011.
Fortress Investment Group LLC (NYSE:FIG) shares were up 1.93 percent to $6.35 in New York trading.