Loss widens at Fortress Investment

15 August 2007

Fortress Investment has posted a net loss of $55 million for the second quarter.

The figure represents a widening of last year's loss of $42 million, as the fund struggled with soaring compensation costs.

Chief among these were rising employee salaries and benefits, which were up to $187.8 million from $100 million for the year ago period.

The firm also paid a one-off charge of $276.1 million for the issue of stock to its staff.

However, revenue for the hedge fund and private equity company was up to $283 million in the second quarter from $189 million a year earlier.

This was partially assisted by the firm's assets under management growing 70 per cent to $43.3 billion, but was due principally to the increased revenue from hedge fund products, where earnings for liquid funds surged from $38 billion to $151 billion.

Since launching an initial public offering this year, shares in Fortress have dropped 38.7 per cent, with concerns that the current credit crunch will threaten buyouts thought to be hampering its performance.

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