Most businesses fall off tracks within their second year of operation. Fortress investment group didn’t just defy this conventionalism but went on to become the most successful hedge fund in its first decade of operation. Even with numerous odds stuck against it in the periods leading to the financial crisis in 2009 that threatened its sustainability, the alternative investment banker survived it all to regain its market share in the industry? But what does it take to grow such a successful brand?
In the last two decades that Fortress Investment Group was in operation, it came under heavy fire from authorities, internal conflicts, and numerous operational challenges. The company was only able to overcome all this due to the expert skilled leadership it enjoys from the likes of Randal Nardone as its CEO as well as Peter Briger and Wes Edens as the Co-Chairs.
In the asset management world, there is only so much a hedge fund can reap from one investment vehicle. Fortress group founders understood this from the onset and, therefore, sought to diversify into different markets. They created different departments within the fund headed by the key principles based on their investment strengths and experience.
Adaptability to changing industry dynamic
Fortress investment group invested heavily in the credit markets division with a particular interest in real estate investment and such distressed debts as mortgages. At one time, the credit department led by Wes Edens contributed as much as 30 percent of the company’s total revenues. This would, however, change when the real estate bubble burst in 2008, with the resulting financial crisis deconstructing the company’s shares and diminishing their value.This put the partner’s crisis management skills to test. They would nonetheless survive by shifting their attention from the credit markets fund and concentrating on other equally profitable markets. Their latest move involves the establishment of the first privately owned and operated railway line, Brightline express.
More about fortress investment group
Fortress investment was established in 1998 as an alternative investment banker with interests in multiple industries. It would go on to become the most influential hedge fund soon after takeoff. It was, however, acquired by Softbank in 2017 though it continues to operate independently in New York headquarters.