Deutsche Comments On Fortress Investment Group (FIG) Cutting Its Dividend

Today, Fortress Investment Group (NYSE: FIG) eliminated its Q3 dividend. Fortress said it would like to preserve its $300 million of cash to find quality investments in this distressed financial environment. Fortress' CEO, Wes Edens, said that Fortress would look to invest in distressed assets, banks and other asset management businesses. On the Fortress 2Q08 conference call, FIG management said it may "reduce" the dividend.

Fortress will save approximately $100 million by eliminating the $0.225 Q3 dividend on 462 million dividend-paying shares.

Deutsche said, "net net, the dividend cut is more than expected (eliminated vs. reduced), but with over 3/4th of dividend-paying shares held by principals and employees, it seems reasonable to withhold cash distributions in a period where capital raising (for their funds) has become more difficult despite potential strong investment opportunities."

Fortress Investment Group LLC (Fortress) is a global alternative asset manager that raises, invests and manages private equity funds, hedge funds and publicly traded alternative investment vehicles.
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