Fortress Investment Group’s 13F Portfolio Posts Weak Returns Amid Closing of Macro Hedge Fund and Novogratz’s Departure

Fortress Investment Group’s second top pick, Nationstar Mortgage Holdings Inc (NYSE:NSM), has seen its market capitalization dwindle considerably since March, with it currently trading down by more than 50% year-to-date. Though the firm reduced its stake in Nationstar Mortgage Holdings Inc (NYSE:NSM) by 284,877 shares during the second quarter, it was only a marginal reduction, as it still held 67.3 million shares worth $1.13 billion as of June 30. Analysts expect the company to declare EPS of $0.35 for the third quarter when it reports on October 28, considerably below the EPS of $1.22 that it reported for the same quarter last year. Most analysts that cover the stock have a ‘Hold’ rating on it. On August 3, analysts at Barclays reiterated their ‘Equal Weight’ rating on the stock, but reduced their price target on it to $19 from $21. Ken Griffin‘s Citadel Investment Group more than doubled its stake in Nationstar Mortgage Holdings Inc (NYSE:NSM) during the second quarter to above 4.6 million shares and was its third-largest shareholder at the end of the quarter among the hedge funds we track.

Fortress Transprtn and Infr Investrs LLC (NYSE:FTAI) a subsidiary of Fortress Investment Group made its debut on the public market during the second quarter. By virtue of being its largest shareholder, with ownership of over 53 million shares, Fortress Investment Group counted Fortress Transprtn and Infr Investrs LLC (NYSE:FTAI) as its third-largest equity holding at the end of the quarter. Shares of Fortress Transprtn and Infr Investrs LLC (NYSE:FTAI) lost 28.5% during the third quarter and currently trade down by almost 13.5% from its IPO price of $17 per share. For the quarter ending June 30, the company reported EPS of $0.02 on revenue of $33.56 million, considerably below the EPS of $0.11 on revenue of $40.26 million that analysts were expecting. On October 8, analysts at JMP Securities lowered their price target on the stock to $20 from $21, which nonetheless represents potential upside of over 35%. Neil Chriss‘ Hutchin Hill Capital reported owning 700,000 shares of Fortress Transprtn and Infr Investrs LLC at the end of June.

On the next page we’ll look at the final two stocks that made up Fortress Investment Group’s top five equity picks, both of which also under-performed the already-poor market in the third quarter.