Fortress Executives to Cash In $1.39 Billion From SoftBank Sale

  • Top bosses Briger, Edens and Nardone will remain in charge
  • Half of after-tax sale proceeds will be reinvested in funds

The three leaders of Fortress Investment Group LLC will reap a combined $1.39 billion from the sale of the alternative-asset manager to SoftBank Group Corp.

Co-Chairmen Pete Briger and Wes Edens own stakes worth $510 million and $511 million, respectively, at the $8.08 per-share offer price announced Tuesday, based on ownership disclosed in the company’s most recent proxy statement. Chief Executive Officer Randy Nardone’s Class A shares were valued at $371 million.

The trio have agreed to remain in charge of the business and invest half of their after-tax proceeds from the sale in the company’s funds, according to a statement.

Buying Fortress is an effort by Japan’s SoftBank to bring investment talent in-house as founder Masayoshi Son works to create a $100 billion Vision Fund with a consortium of backers, making the billionaire one of the world’s biggest technology investors. The deal for Fortress is for both “human capital” and “investment potential,” according to a person with knowledge of the matter, who asked not to be identified because SoftBank’s strategic details aren’t public.

The offer for New York-based Fortress is 39 percent above its Feb. 13 closing price and values the asset manager at $3.3 billion. Shares of Fortress closed up 6.5 percent at $6.21 on Tuesday, giving the company a market value of about $2.4 billion.

Fortress was founded in 1998 by Edens, Nardone and Robert Kauffman. Briger was hired from Goldman Sachs Group Inc. in 2002. The three founders became billionaires when the firm went public in 2007, but shares have slumped by almost two-thirds since the listing after the company faced volatile performance during the financial crisis and struggled to explain its value to public shareholders.

The payout from the sale to SoftBank will mark the second big windfall for the Fortress partners. Edens, Briger and three other principals extracted $1.7 billion in dividends and private stock sales from Fortress before it went public.

— With assistance by Devin Banerjee, Peter Elstrom, David Carey, and Pavel Alpeyev

    Before it's here, it's on the Bloomberg Terminal.