SoftBank has yet to decide on a preferred bidder for Fortress Investment Group, which owns stakes in hedge funds including Perry Capital LLC and private-equity fund Cerberus Capital Management LP, one of the people said. Representatives for Fortress, the Tokyo-based company, and SoftBank declined to comment. Cerberus Capital Management LP, a Fortress investor since 2007, was not immediately available for comment.
There are no ongoing sale discussions of the New York Fortress, SoftBank spokesman Chris Fusco said. There have been no investments for the Vision Fund on the West Coast and are not currently in the process of seeking to raise additional capital, he said. SoftBank has said it plans to separate its domestic telecom operations from the $100 billion technology fund.
Fortress Investment Group investment teams are likely to be retained following a potential sale, and the firm will continue to operate globally with its management team. One of the people said that the firm is also expected to pursue partnerships or other arrangements with the new owners.
The deal made SoftBank the largest owner of private-equity investments in the U.S., where Fortress manages $41 billion in assets for pension funds, endowments, and other investors. The New York Fortress could attract interest from private-equity firms and other investors, the people said. The company has become one of Japan’s largest real estate investors, and some employees and fund managers have expressed interest in joining SoftBank’s Vision Fund, the people said.
SoftBank, which owns an 80% stake in Fortress Investment Group, has been considering divesting some of its shares to reduce exposure to its other holdings, such as Yahoo Japan Corp., one of the people said. The person said that SoftBank is also interested in acquiring Fortress’s management and investment platform.
At a conference Tuesday, SoftBank Chief Executive Officer Masayoshi Son talked about various options to make Vision Fund-related transactions more tax efficient. According to a statement issued by SoftBank, he added that any transaction would be a combination of a sale and a buyout.
SoftBank, which used Fortress Investment Group for real estate lending in the U.S. before integrating it into the Vision Fund, has held discussions in recent months with Goldman Sachs Group Inc. about possibly selling the asset manager, one of the people said. The discussions haven’t reached a point where Goldman will act as an advisor.