SoftBank’s Possible Plans for Fortress Investment Group: This may include the sale
SoftBank’s options include retaining Fortress Investment Group or taking it private, selling off the asset management unit, or retaining both. The idea is to create a single alternative-asset platform. The people said that the Japanese company has yet to weigh the merits of those plans. SoftBank could also elect to pull back some of Fortress’s portfolio company investments.
SoftBank is in talks with financial advisers about several options regarding Fortress. Chief Executive Officer Masayoshi Son is also weighing the merits of holding onto Fortress and instead possibly merging it with existing or new portfolio companies or selling it outright, they said.
For the New York Fortress, a sale would offer an opportunity to focus on managing the assets it already has, rather than overseeing investments in new funds, the people said. The people said that SoftBank might be opened to selling an equity stake in Fortress rather than the whole firm.
According to data compiled by Bloomberg, the Fortress Investment Group has around $60 billion in assets under management. SoftBank may also sell Fortress’s asset-management division, which currently manages about $36 billion, and retain the private-equity operations, the people said. They said that its financial-technology businesses, which includes global markets, real estate, and hedge funds, aren’t up for sale.
SoftBank’s advisers have spoken to investment banks about potential options for the business, and made no decisions, one of the people said. Both the Vision Fund and Fortress’s assets-management division sit outside SoftBank’s global financial business, making the parent company hesitant to divest the assets, one of the people said.
The Fortress Investment Group discussions come as SoftBank plans to begin raising a third $100 billion Vision Fund this year and aims to substantially ramp up its presence in investments in the technology industry. SoftBank has disclosed an investment of more than $8 billion in Uber Technologies Inc. that was revealed last year and a commitment to invest more than $5 billion in the ride-hailing startup’s rival Ola, backed by China’s Didi Chuxing.
It was not clear what a possible deal would be worth. One reason SoftBank has held onto Fortress is that it doesn’t want to weaken a business that has performed well for the company, one of the people said. A person with knowledge of Fortress Investment Group noted that “growth has exceeded expectations” and that while performance could deteriorate with any change in leadership, the New York Firm still has significant assets under management.