There are a few good reasons why we believe a successful trend cannot burgeon out of this first example, and they are closely related to the incentive of creating a hedge fund in the first place. (I should know, having spent months developing a business plan and strategy that I have yet to market.) The key incentive of creating a management company and hedge fund is the profit incentive fee, usually 20% of profits. When you sell your stake to shareholders, suddenly some or all of that incentive is transferred. If taken away significantly from the managers and transferred to shareholders, we believe the managers are likely to retire or perform less effectively than they did when they were working for that fee.
In the case of Fortress, its managers are retaining a large stake in the firm, and that is likely the reason why its shares are trading higher. Even so, we regard this as a form of cashing out, and view it as a negative factor for investors within Fortress' fund.