Hedge Funds

Fortress preps credit strategy

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Fortress Investment Group is trying to raise $2 billion for a credit fund that will invest in distressed residential mortgage loans, distressed securities and mezzanine debt - but unlike many operations pursuing these assets will use a private equity structure.

The New York firm, which manages $14.84 billion of hedge fund assets (as well as considerable private equity and other alternative assets) and last year became the first hedge fund to execute an initial public offering of shares in its business, plans to launch the vehicle this quarter.

The Credit Opportunities Fund will target gross returns in excess