Owners of Newcastle Investment (NCT) will want to read this NYT article on the latest hot distressed asset play: Golf courses. “It’s certainly a buyer’s market,” says Larry Hirsh of Golf Property Analysts. “There are a lot of distressed courses, financing is difficult and most buyers don’t have the ability to write a check.”
Imagine, says one industry player, Wells Fargo and Chase suddenly exiting the home mortgage market, and that's what it's like for golf course financing. This leaves opportunity for other investors, including Fortress Investment Group (FIG) which last year began financing a Dallas-based P-E firm looking into golf courses. Fortress' Co-Chairman Wes Edens is also the chairman at Newcastle which - following the spinoff of its seniors housing unit - will be nearly a pure-play golf course operator.
Already deep into an investigation of nonbank servicers of residential mortgages, NY's Ben Lawsky is prepping a probe of commercial real estate loan servicers, reports Reuters.
At issue are whether subsidiaries are wrongly profiting from loans they are servicing. A case in point is CWCapital (owned by Fortress) - one of the CMBS industry's top 3 servicers - which manages Stuyvesant Town's $3B in defaulted CMBS. CW also controls the sale process for the complex and Fortress Investment (FIG +1.1%) is putting together a bid.
"What steps are they taking to prove they got market bids," says an observer. "That seems to me what [they] are going to check."
Starwood Property Trust (STWD -3.6%) takes the news hard.
Another banker exits that industry to join private-equity, with Citigroup's head of developed markets foreign-exchange, Jeff Feig, announced as co-CIO of the Fortress (FIG +1.1%) Macro Fund. Feig will also serve as co-President of Fortress' Liquid Markets business.
Feig has been at Citi for 25 years, and led the FX business there for the last ten. Citi and a number of other global banks are currently under investigation for foreign-exchange market manipulation, and a number of senior traders in the industry have been let go. Feig is wrapping up his duties at Citi, and is expected to join Fortress this Fall.
High-fliers in 2013, the private equity names have struggled this year, but Oppenheimer is a buyer on the dip as the fundamentals remain strong. The team's favorites are Carlyle Group (CG +0.5%), KKR (KKR +0.7%), and Fortress Investment (FIG +0.9%).
Massive Manhattan apartment complex Stuyvesant Town-Peter Cooper Village is back on the market four years after its owners defaulted on a $3B-plus mortgage and Fortress Investment Group (FIG), reports Bloomberg, is looking to get financing for a $4.7B bid.
Stuyvesant Town is currently under the control of special servicer CWCapital, which is owned by Fortress. CWCapital has begun the process of foreclosing on the property's mezzanine debt, a move which would pave the way for a sale.
The complex was purchased at the height of the bubble for $5.4B and recently appraised at $3.4B. A $4.7B bid would certainly speak to the resurgence of NY's rental market. Brookfield Asset Management (BAM) continues to work with tenants seeking to put together their own bid for the property.
The global investment team of Centaurus Capital will join Fortress Investment Group's (FIG) Liquid Markets business. Centaurus was co-founded in 2000 by Randy Freeman and Bernard Oppetit and today has about $7.7B in AUM.
Leading off the 2014 Ira Sohn conference, Fortress Investment Group's (FIG -0.8%) Mike Novogratz says it's a pretty challenging macro environment without many great themes. One he does like though, is Brazil, where - after four tough years - business confidence is low, consumers are levered up, the government is fiscally stretched, and inflation is high ... "It's so bad, it's good."
One caveat would be the fall re-election of Dilma Rousseff, he says, and the country is in for a "long, long dark period" if she pulls it off (her numbers though, seem to be sliding on a near-daily basis).
Perhaps anticipating a Rousseff defeat, not to mention the end of a long rate-hike cycle, the Bovespa has been maybe the strongest reasonably-sized market on the planet of late, up almost 20% since mid-March.
Private equity firms have been aiming to reach a new group of investors, and KKR is making it happen, teaming with Nasdaq OMX (NDAQ) to form an exchange in which investors can sell a portion of their stakes in KKR buyout funds. KKR is likely to file regulatory paperwork as soon as this month, reports the WSJ.
The institutions and wealthy individuals who invest in P-E buyout funds (with minimums of millions of dollars required) typically must agree to have their money tied up for a decade or more, but this deal will allow them to sell smaller investors slices for as little as tens of thousands of dollars - the investors can cash out earlier than usual and the P-E firms get a far broader range of investors.
The already-public listings of P-E firms on major exchanges - with BX, CG, APO, FIG for instance, joining KKR - offer mom and pop investors shares in the parent companies rather than the individual buyout funds.
Fortress Investment Group (FIG) has extended its involvement in the world of Bitcoin by acquiring a stake in Pantera Bitcoin Partners, a hedge fund of around $150M that buys and sells virtual currencies.
Fortress' investment comes despite the company making a small paper loss on Bitcoin last year and the recent collapse of a major exchange following a massive theft.
Fortress already has a relationship with Pantera Bitcoin's parent, Pantera Capital, which has shifted its entire focus onto the virtual currency. Fortress was joined in the investment by venture-capital firms Benchmark Capital and Ribbit Capital.
Pantera Capital Management - a hedge fund managing money for Fortress Investment Group (FIG) - invested about $10M in Bitstamp ahead of its emergence as the dominant Bitcoin exchange (up to 50% market share since the Mt. Gox collapse), reports Bloomberg.
Led by founder Dan Morehead (formerly a top man at Tiger Management), Pantera has a $147M fund called Pantera Bitcoin Advisors. Fortress' Michael Novogratz calls Morehead "our man when it comes to Bitcoin." The Bitstamp investment wasn't Pantera's first Bitcoin-related deal. It was part of $9M in funding for digital-currency business Ripple Labs, which also counts Google among its backers.
Fortress, if you remember, last month disclosed a $3.7M paper loss on $20M of Bitcoin purchased in 2013. "Put a little money in Bitcoin,” Novogratz told a banking conference last October. “Come back in a few years and it’s going to be worth a lot.”
The offering size is 28.28M Class A shares with underwriter greenshoe of 4.242M. Insiders are selling about 5.077M shares. Fortress (FIG) will use the proceeds to purchase an equivalent number of outstanding Fortress Operating Group partnership units from company principals.