Nomura Holdings Inc. (8604), Japan’s largest investment bank, said it generated 21 billion yen ($205 million) of profit from the sale of a stake in U.S. asset manager Fortress Investment Group LLC. (FIG)
Nomura will include the gains in its results for the fourth quarter ending March 31, Kenji Yamashita, a spokesman at the Tokyo-based brokerage, said today. The Japanese company sold a 12 percent stake in Fortress yesterday for $363.4 million.
The one-time gain may bolster earnings at Nomura, which bought the stake seven years ago, and help offset a potential slump in trading revenue and brokerage commissions as Japan’s stock rally fades. The Nikkei 225 Stock Average (NKY) has slid 11 percent this year, the worst performer among developed markets.
Fortress, the first publicly traded alternative-asset manager in the U.S., repurchased the 12 percent stake for $6 a share, according to a statement yesterday from the New York-based firm. The stock is still below the $18.50 at which Fortress sold shares to the public in 2007.
Shares of Nomura fell 2.3 percent to 680 yen at the midday trading break in Tokyo, extending this year’s decline to 16 percent. The Nikkei 225 slid 0.7 percent today.
Nomura’s profit may drop to 53 billion yen in the three months ending March from 82.4 billion yen a year earlier, according to the average of eight analyst estimates compiled by Bloomberg last month.
The Japanese brokerage bought a 15 percent stake in Fortress in December 2006 for $888 million, paying $16.12 a share to the company’s principal executives, who included co-founders Wes Edens, Bob Kauffman and Randy Nardone, as well as partners Pete Briger and Michael Novogratz.
Fortress, which oversees $58 billion in hedge funds, credit assets and private-equity funds, plummeted in the years after its IPO, reaching a low of 95 cents in December 2008. The stock yesterday rose 6 percent, the most since April 2013, to close at $8.47 in New York trading.
Nomura helped Fortress raise its two Japan Opportunity Funds, which invest in distressed real estate loans and other troubled assets. Fortress’s second Japan fund closed in 2012 with $1.65 billion, following a 2010 pool that raised $800 million.
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