Nomura to buy Fortress Investment stake

19 December 2006

Japanese securities firm Nomura is to buy a 15 per cent stake in US-based Fortress Investment Group for $888 million, the two financial institutions have jointly announced.

In a statement, they said that the deal would help Fortress gain a foothold in the Asian markets as well as strengthening Nomura's global position.

The move by Japan's largest securities house is seen as an attempt to keep up with its US rivals such as Morgan Stanley and Goldman Sachs by diversifying its revenue sources.

Hedge fund managers like Fortress are seen as attractive investment opportunities for banks, thanks to their large management fees and relatively loose regulation.

Wall Street bank Merrill Lynch bought a minority stake in alternative investment manager DiMaio Ahmad Capital in October, while Lehman Brothers bought 20 per cent of commodities investment firm Ospraie Management last year.

Fortress currently manages $26 million worth of assets in hedge funds and other alternative investments.

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