The $46 billion Fortress Investment Group’s ownership is set to change in early 2024, with Fortress management and sovereign wealth fund backed Mubadala Capital buying back Fortress from SoftBank Group.
SoftBank has owned Fortress since 2017, and while the terms of the deal have not been disclosed, the agreement has the purchase closing in the first quarter of 2024. After transaction close, Fortress management is expected to own a 30% equity interest in the company and will hold a class of equity entitling Fortress management to appoint a majority of seats on the board. Mubadala Capital, which currently holds a 9.99% stake in Fortress through its Private Equity Funds II and III, will up its stake to 70% of Fortress equity.
Drew McKnight and Joshua Pack will be appointed co-CEOs of Fortress, while Pete Briger will be appointed chairman. Mubadala Capital’s CEO and Managing Director, Hani Barhoush, who has served on Fortress’ board since 2019, will continue to serve on the board.
“We are extremely pleased to deepen our relationship with Mubadala, partnering with one the world’s most sophisticated investors in a transaction that will provide significant long-term benefits to our company, our employees and the clients we serve,” said Fortress’ Briger, McKnight and Pack in a joint statement. “We have worked closely with Mubadala for years and have enormous respect for their investment acumen and discipline.”
The Fortress team views Mubadala’s backing as an affirmation of its business model and investment approach it has held for more than two decades. The new joint ownership is expected to generate significant value for Fortress stakeholders, officials said, by further establishing itself in the alternative investment space, particularly in credit and real estate across public and private markets, where it currently manages capital on behalf of more than 1,900 institutional investors and private clients.
Dean Dakolias will continue in his role as managing partner and Tom Pulley will continue in his role as the CEO of the global Fortress Real Estate business. Jack Neumark has been appointed a managing partner and will continue to lead the Legal Assets business and co-head the Specialty Finance business. Marc Furstein will continue in his role as president. Fortress Co-Founders Wes Edens and Randy Nardone will continue to oversee the PCV business and remaining PE investments, including Brightline.
Fortress said it will benefit from Mubadala Capital’s global network and extensive portfolio of diversified assets, as well as its access to proprietary investment opportunities to support its growth and expansion.
“Fortress is a world-leading investment manager with a proven track record of delivering superior risk-adjusted returns to its investors throughout business cycles,” said Hani Barhoush, CEO and managing director of Mubadala Capital. “Over the last 20 years, they have built an incredible franchise and established themselves as a premier credit and asset investor while simultaneously growing investment strategies across a wide range of asset classes. We have a strong existing relationship with Fortress’ exceptional management team, and are excited to deepen the relationship further in the years ahead based on a strong alignment of vision, while delivering even greater value to our investors.”
For its part, $284 billion Mubadala Investment Company, which owns Mubadala Capital, has forged joint ventures earlier this year with Ares for credit secondaries and Alpha Dhabi Holding PJSC to invest in credit. The Alpha Dhabi JV, set to deploy $2.5 billion over the next five years, leverages Mubadala’s long term strategic partnership with Apollo.