Fortress Investment Group and Mubadala Investment Company—through its wholly-owned asset management subsidiary Mubadala Capital—announced that they had completed the previously announced acquisition of SoftBank Group’s 90.01% equity in Fortress. The terms of the deal were not disclosed.
With the close of the deal, Fortress management now owns a 32% equity interest in the company in a class of equity entitling Fortress management to appoint a majority of seats on the board. And Fortress co-CEOs Drew McKnight and Josh Pack, Managing Partner Jack Neumark, and co-Chairman Pete Briger are the most significant individual investors in the buy-out and were joined by about 150 firm members.
A consortium led by Mubadala Capital now owns 68% of Fortress’ equity. Mubadala Capital’s CEO and Managing Director Hani Barhoush (who has served on Fortress’ board since 2019) continues to serve on the board. Fortress also continues to operate as an independent investment manager under the Fortress brand, with full autonomy over investment processes and decision-making, personnel, and operations.
With the new joint ownership, Fortress expects to further establish itself as a leader in the alternative investment space, especially in credit and real estate across public and private markets, where it currently manages over $48 billion of assets on behalf of about 2,000 institutional investors and private clients. And Fortress expects to benefit from Mubadala Capital’s global network and extensive portfolio of diversified assets, utilizing the companies’ extensive shared experience and resources to expand sourcing channels, build new client relationships and to support strategic growth and expansion.
Ardea Partners served as financial advisor and Shearman & Sterling LLP (now A&O Shearman) served as legal counsel to Mubadala. Goldman Sachs served as financial advisor and Kirkland & Ellis served as legal counsel to Fortress senior management in the transaction. And Skadden, Arps, Slate, Meagher & Flom LLP represented Fortress in the transaction. The Raine Group served as exclusive financial advisor and Morrison Foerster served as legal counsel to SoftBank.
KEY QUOTES:
“This is a true landmark event for Fortress, for our employees, and for the clients we serve. Today, approximately 150 eligible members of the Fortress team invested in their colleagues and our collective success, becoming equity owners of a company many of us have been a part of for over 20 years. We have strengthened alignments of interest, put significant management skin in the game, and deepened our long-term partnership with Mubadala, one of the world’s most highly regarded investors. With an investment landscape continuing to align with our greatest strengths, we could not be more excited about the future for Fortress, our investors, and our employees.”
– Fortress co-CEOs Drew McKnight and Joshua Pack
“Mubadala Capital and Fortress have developed a strong partnership since our initial investment in 2019. The completion of this transaction marks an important step forward as we seek to leverage our combined expertise and global networks to capitalize on emerging opportunities within the alternative investments space. Looking ahead, we are confident that collectively, we will unlock significant value creation opportunities and deliver superior risk adjusted returns to our investors and to Fortress’ stakeholders.”
– Hani Barhoush, CEO and Managing Director of Mubadala Capital
