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Technology Stocks : Blank Check IPOs (SPACS) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (596)	2/10/2007 9:33:51 AM
From: Glenn Petersen	Read Replies (2) \| Respond to of 3862

While off topic, it may be of interest to some of the participants on this thread that Fortress Investment Group has become the first U.S. based hedge fund to go public. The company raised $634 million yesterday (not including the over-allotment option), and the stock closed up 67.6%. First Offering of a Hedge Fund Is Bid Up 67% on Opening Day By MICHAEL J. de la MERCED Published: February 10, 2007 Investors stormed Fortress Investment Group yesterday, driving its shares up 67.6 percent in the first American market debut of a hedge fund manager. The offering was eagerly anticipated because it gives a much bigger pool of investors the opportunity to share in the returns of hedge funds and private equity. Those alternative private investments are limited to the very wealthy and to large institutional investors like pension funds and university endowments. Class A shares of Fortress closed at $31, after touching a high of $37, up 67.6 percent from an offering price of $18.50. The reception for Fortress, which also manages private equity funds, was the second-best for an initial public offering of a financial company since 2001. Its performance was topped only by the November initial public offer of Nymex, the parent of the New York Mercantile Exchange, which rose 125.4 percent on its first day, according to Thomson Financial. “What’s surprising isn’t that the deal opened high or that it priced at the upper end of its range,” said David Menlow, president of the research firm IPOfinancial.com, who called Fortress a good investment. “Putting the two together was surprising.” The offering gives Fortress a market value of $12.4 billion. While its offering is a first in the United States, some hedge fund managers and private equity firms have listings on European markets. As a point of comparison, the Man Group, the British hedge-fund manger, has a market value of $21.7 billion on the London Stock Exchange, while the private equity firm 3i Group is worth $10.2 billion. After the offering, 8.6 percent of Fortress is held by shareholders. Nomura Investment Managers U.S.A., a division of the Japanese bank, owns 13.7 percent after paying $888 million in December. The five principals of the firm own 77.7 percent. The five also own all the class B voting shares. Now that Fortress’s offering has proved a success, analysts expect that other funds may follow suit. But investors should remain wary of hedge fund stocks, Mr. Menlow of IPOfinancial.com said. Because their trades can quickly turn south, hedge-fund returns can prove extremely volatile. “It’s not the type of company that people should say, ‘Oh, it’s a hedge fund, I can retire on it,’ ” he said. “This is a high risk-reward ratio play.” nytimes.com