Fortress Investment Group (FIG) IPO

Hedge funds are for wealthy investors, not for small investors like you and me. But what if you can own a piece of the hedge fund company?

According to USAToday, Fortress Investment Group , which has six hedge funds with a total about $9.4 billion of assets under management, has filed paper to offer 34.3 million shares in its IPO. IPOHome.com has reported that the stock is priced at $18.50, the high end of its $16.50 to $18.50 range. The stock will begin trading Friday morning (February 9, 2007) under ticker symbol FIG.

While the idea of investing in a hedge fund manager sounds appealing (yes, investors of FIG only own part of the company, not the hedge funds it manages), considering the growth of the hedge fund industry in recent years, there are some risks involving in this offering, according to USAToday:

  • Lack of detail on what the company invests in. Hedge funds are not required to detail their investments.
  • Fickle investors. The company’s performance has been strong and helped it build up $30 billion in assets. But a stumble in performance could send investors rushing for the exits.
  • Complex structure. Public stockholders will own only about a third of the company and have 9% voting control.

Before jumping in, make sure you know what you are buying.

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3 Responses to “Fortress Investment Group (FIG) IPO”

  1. Bob |  Feb 09, 2007 at 10:38 am

    Sun, the ticker is FIG not FIP.It’s already shot up to $37.

  2. The Sun |  Feb 09, 2007 at 10:46 am

    Thanks for point it out. I corrected the symbol already.

    It looks like this stock certainly attracted lots of interests. I checked my Scottrade and found it opened at $35, almost doubled the IPO price. It will be interesting to see where it goes considering the interests in hedge funds.

  3. Moneymonk |  Feb 09, 2007 at 11:05 am

    I think investing in anything takes a risk. A hedge fund to me, will increase slightly more and faster than an average fortune 500 company stock.

    I may add this one to my watchlist.