Inside the Fortress


The Fortress IPO is a gamble on the continued growth of hedge funds and, more importantly, private equity. With a multiple in the high 30s, the Fortress principals will rake in the bucks – and offload risk to new shareholders while maintaining control through a complicated new structure. What’s not to like?

The IPO will shower riches on its trendsetting principals, but is it a good model?

When rumors surfaced last May that Fortress Investment Group was considering an initial public offering, it seemed an outside possibility. Equity markets were tanking around the world, and the private equity, real estate and credit markets that dominate Fortress's alternatives business were looking a little precarious.

But by November 8, the date Fortress registered with the U.S. Securities and Exchange Commission to sell a 10% slice of a newly created holding company, the storm appeared to have passed - at least