SoftBank Group Considering Selling Fortress Investment Group
Fortress Investment Group has previously said it is open to a sale or merger, but there’s no certainty a deal will occur, Bloomberg reported earlier this year. The New York Fortress remains the largest credit manager focused on the U.S. leveraged loan market.
SoftBank’s Vision Fund is the largest and most established clutch of new vehicles that can raise billions of dollars of capital for technology investments with relatively few strings attached. One of the fund’s biggest backers is Saudi Arabia’s public investment fund, with a commitment of about $45 billion.
Fortress Investment Group, which manages more than $49 billion in private equity, hedge fund, and real estate investments, failed to fit neatly with SoftBank. Its businesses are entirely different, according to the people. Some investors in Fortress funds have been reluctant to tap the Vision Fund due to the poor performance of some of the firm’s private equity funds.
Those complexities prompted SoftBank to explore options for Fortress Investment Group, including a sale, after talks with Blackstone Group LP to merge the two firms fell through in November. The discussions were over Fortress’s buyout fund and its credit-focused Fortress Special Opportunities Fund and Fortress Asia Macro Opportunities Fund, which together have about $10 billion in assets.
One of the people said that SoftBank is looking to sell its stake in the New York Fortress, not its entire business. Discussions with potential buyers are early, and the companies may decide not to proceed with a sale or continue with discussions.
A representative for SoftBank, which billionaire Masayoshi Son controls, said the company has no comment on Fortress. Fortress Investment Group also declined to comment. A sale could be an effort by SoftBank to focus on more promising opportunities in the Vision Fund.
The fund has already made more than 100 investments in technology, media, and telecoms, mainly in the U.S. Its backers include Saudi Arabia’s sovereign wealth fund, Apple Inc., Foxconn Technology Group, Qualcomm Inc., Oracle Corp.