Fortress Investment Group LLC
) reported third-quarter 2013 pre-tax distributable earnings of
13 cents per dividend paying share, missing the Zacks Consensus
Estimate by 4 cents. However, this compared favourably with the
year-ago figure of 12 cents.
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Higher revenues, lower expenses, stable balance sheet position
and improved management fee paying Assets Under Management (AUM)
were the positives for the quarter. However, the company's Liquid
Hedge Fund division and the Logan Circle division suffered
On a GAAP basis, net income surged to $101 million from $7.0
million in the year-ago quarter.
Total revenue increased 27% year over year to $232 million in the
reported quarter. It also surpassed the Zacks Consensus Estimate
of $215 million.
Other income rose 36% year over year to $68 million.
Operating expenses declined 17.0% from the prior-year quarter to
$184 million. This was mainly due to fall in interest expenses
and employee compensation expenses.
As of Sep 30, 2013, management fee paying AUM rose 13% year over
year to $57.8 billion.
As of Sep 30, 2013, total uncalled capital came at $7.2 billion,
which is available for common investment purposes.
As of Sep 30, 2013, cash and cash equivalents were $311.1
million, compared with $104.2 million as of Dec 31, 2012.
Notably, there was no debt obligation outstanding in the quarter.
Along with the earnings release, the company declared
third-quarter cash dividend of 6 cents per Class A share. The
dividend will be paid on Nov 15 to shareholders of record as of
Performance of Other Asset Managers
Third-quarter earnings per share of
Ameriprise Financial Inc.
) outpaced the Zacks Consensus Estimate. Better-than-expected
results were mainly attributable to a rise in revenues, partially
offset by higher expenses.
) third-quarter adjusted earnings were in line with the Zacks
Consensus Estimate. Results on a year-over-year basis benefited
from a rise in revenues, partly offset by higher operating
The Blackstone Group L.P
) third-quarter economic net income marginally missed the Zacks
Consensus Estimate. Lower-than-expected results were due to a
fall in the top line, partially offset by lower expenses.
Fortress Investment Group's consistent organic growth, expense
management and a strong balance sheet are impressive. However, a
stringent regulatory landscape remains the concern.
Currently, the company carries a Zacks Rank #4 (Sell).