The investment firm Fortress Investment Group is looking to provide capital to investors by using a direct lending fund. Along with providing capital to investors using this fund, Fortress is also looking to expand its capital through additional funding sources as well. These additional funding sources will include the investment in valuable assets, financial securities, real estate debts, leases for aircrafts and intellectual property. Since the firm is currently owned by SoftBank Group, Fortress will rely on this entity to complete the closing of this direct lending fund. This transaction will officially close in October of 2018 for an amount of $2 billion.
Fortress Investment Group needs to accumulate $500 million in order to complete this asset fund. As of right now, the firm has come up with $400 million. One of the things that Fortress has in its favor is a healthy credit market. With a healthy credit market, it will likely be quite easy for the firm to raise the final $100 million for the fund. In order to raise this remaining capital, Fortress will be in position to take advantage of the private credit markets. With private credit markets, the firm will have the opportunity to benefit from high yields which are most beneficial for both small and medium sized businesses. Along with receiving high yields, Fortress will also be able to benefit from other companies that avoid investing in open end asset funds.
In recent months, Fortress Investment Group has looked to take full advantage of investing in open end asset funds so that it can more efficiently raise capital. Open end asset funds are mutual funds that have no restrictions on the number of shares that one can issue. They are able to allow investors to issue a number of shares of both stocks and bonds. With open end asset funds, Fortress will also be able to benefit from the unregulated debt markets as well. While Fortress Investment Group has a lot of things in its favor, the rising interest rates are a concern. However the firm is looking to manage this risk by extending credit to any new purchaser of securities.