Fortress Investment Group LLC (NYSE:FIG) did more than well in second quarter ending on June 30. The alternative asset manager posted a 196% increase in profits compared to the year ago quarter, beating all analyst estimates. The asset manager reported pre-tax EPS of $0.3 or $148 million which is a huge increase to the $50 million or $0.09/share earnings it reported in Q2 2012. Fortress Investment Group LLC (NYSE:FIG)’s revenue for the quarter was up 12.1% on a y-o-y basis.
Fortress maintains dividend at $0.06
The company maintained its dividend at 6 cents and did not raise it in this quarter, as opposed to the expectations of RBC Capital Market analysts Bulent Ozcan and Eric Berg. Ozcan said that the move was conservative given that the asset manager reported a major hike in its pretax earnings, however they expect a siginificant increase in dividend in the fourth quarter of this year. RBC has an Outperform rating on Fortress Investment Group LLC (NYSE:FIG).
Ozcan said in his note, “There were a number of positive developments in the quarter, driving incentive income above our expectations. The company seems to be running on all cylinders.”
Fortress raising new capital
Fortress Investment Group LLC (NYSE:FIG) has raised new capital in the last few months, and the company had $6.6 billion of unused capital or ‘dry-powder’ as of June 30 which allows it the benefit of pursuing more investments. The asset manager closed the $1.1 billion Fortress MSR Opportunities fund at the end of July. Fortress has gathered $470 million in July and raised another $300 million today, the company announced.
In the last quarter, performance fees from Fortress’ funds amounted to $199 million, a 323% increase from $47 million that the company reported in the year ago quarter. An increase in incentive income fees means that the fund managers are netting more profits from the good performance of the underlying investment funds. Fortress Macro Fund, which is managed by Michael Novogratz and Adam Levinson, has returned 13.13% in the first half of the year. The fund was down 0.58% in June and has netted a +9.1% gain in Q1. In the liquid hedge fund business, Fortress reported incentive income of $64 million in the last quarter.
Earlier in the week, we covered Fortress Asia’s May performance, wherethe macro fund is up 12.8 percent in this first half of the year after putting up a +9.8% gain in the second quarter.
Fortress Investment Group LLC (NYSE:FIG) has done better than its peers in this quarter, Franklin Resources, Inc. (NYSE:BEN) reported EPS of $0.85 which beat consensus estimates but was much lower than earnings of $2.12/share reported in 2Q2012, however revenue increased 16% y-o-y. Invesco Ltd. (NYSE:IVZ), another asset manager, reported GAAP earnings of $0.45/share compared to $0.49 in the earlier quarter.
This marks the best quarter of Fortress Investment Group LLC (NYSE:FIG) since the first quarter after IPO.
Shares of FIG were trading up 2% today.