Hedge Funds Aren’t Crazy About Fortress Investment Group LLC (FIG) Anymore

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Fortress Investment Group LLC (NYSE:FIG) has experienced a decrease in hedge fund interest in recent months.

According to most traders, hedge funds are assumed to be unimportant, outdated investment tools of years past. While there are over 8000 funds in operation at present, we at Insider Monkey choose to focus on the aristocrats of this club, around 450 funds. Most estimates calculate that this group controls the majority of the hedge fund industry’s total asset base, and by monitoring their best picks, we have revealed a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Fortress Investment Group LLC (NYSE:FIG)Equally as integral, optimistic insider trading sentiment is another way to break down the financial markets. Just as you’d expect, there are lots of reasons for an executive to cut shares of his or her company, but just one, very clear reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this strategy if shareholders understand what to do (learn more here).

Consequently, let’s take a gander at the key action surrounding Fortress Investment Group LLC (NYSE:FIG).

What does the smart money think about Fortress Investment Group LLC (NYSE:FIG)?

In preparation for this quarter, a total of 8 of the hedge funds we track were long in this stock, a change of -33% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly.

According to our comprehensive database, Jim Simons’s Renaissance Technologies had the largest position in Fortress Investment Group LLC (NYSE:FIG), worth close to $13.4 million, accounting for less than 0.1%% of its total 13F portfolio. The second largest stake is held by Legg Mason Capital Management, managed by Bill Miller, which held a $12.9 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Ric Dillon’s Diamond Hill Capital, Robert Joseph Caruso’s Select Equity Group and D. E. Shaw’s D E Shaw.

Because Fortress Investment Group LLC (NYSE:FIG) has experienced declining sentiment from hedge fund managers, logic holds that there exists a select few funds who sold off their entire stakes heading into Q2. At the top of the heap, Leon Cooperman’s Omega Advisors said goodbye to the largest position of the “upper crust” of funds we track, totaling close to $4.9 million in stock., and Wojciech Uzdelewicz of Espalier Global Management was right behind this move, as the fund said goodbye to about $0.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 4 funds heading into Q2.

What do corporate executives and insiders think about Fortress Investment Group LLC (NYSE:FIG)?

Insider purchases made by high-level executives is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the last 180-day time period, Fortress Investment Group LLC (NYSE:FIG) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Fortress Investment Group LLC (NYSE:FIG). These stocks are Och-Ziff Capital Management Group LLC (NYSE:OZM), KKR & Co. L.P. (NYSE:KKR), AllianceBernstein Holding LP (NYSE:AB), Waddell & Reed Financial, Inc. (NYSE:WDR), and Federated Investors Inc (NYSE:FII). This group of stocks belong to the asset management industry and their market caps are similar to FIG’s market cap.

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