Hedge fund group to price IPO Feb. 8

FEB 02, 2007
Fortress Investment Group LLC will price its initial public offering on Feb. 8, making it the first hedge fund or private equity firm to become publicly traded, according to a filing with regulators today. The New York-based hedge fund and private equity firm plans to sell 34.3 million Class A shares priced at between $16.50 and $18.50 each, valuing the offering between $566 million and $635 million, the filing said. Principals of the firm, which will trade on the New York Stock exchange under the ticker symbol "FIG," will hold roughly 78% of the shareholder voting power after the IPO, according to the filing. The underwriters, Goldman Sachs Group Inc., Banc of America securities LLC, Citigroup Inc., Deutsche Bank Securities Inc. and Lehman Brothers Inc., will have an option to buy an additional 5.1 million Class A shares to cover over allotments. The company had assets of $29.9 billion — including $9.4 billion in hedge funds — as of September 2006, up from $1.2 billion as of December 2001. One industry expert sees this as the beginning of a trend. "Over the next three years you will see more hedge fund and private equity firms going public," said Charles Gradante, managing principal of Hennessee Group LLC in New York. "Doing the IPO is a good way to monetize equity in your hedge fund and it is a much better alternative to selling out to an investment bank."

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