Fortress Investment Group has some new funds for its investors. One of these is an open-end fund that invests in private credit. Once it hits $2 billion, it will be closed. This fund is being used to invest in companies around the world. Another fund was created that invests in intellectual property rights. A third fund they introduced invests in real estate debt, aircraft leases, and other asset debts.
This company is owned by SoftBank and has helped the Japanese conglomerate become one of the world’s most profitable investment firms. Fortress Investment Group intends to profit from a globally healthy private credit market. They are lending capital to small and midsized firms and their funds are drawing investors away from pension plans, insurance, and sovereign wealth funds.
Private credit is given to companies after the two parties have carefully negotiated the terms. This type of credit is not traded publicly which makes it different than bonds. When Fortress Investment group lends private credit, it is done as a loan. This could be a direct loan, a structured loan, or mezzanine financing. Check out inc.com to learn more about fortress investment group.
There are a few differences between an open-end and a closed-end fund. In an open-end fund, there are no restrictions on how many shares are created. Mutual funds are a very useful way to invest as they provide an easy way to diversify their portfolio. If an open-end fund gets too large, its portfolio manager can close it off to new investors.
NAV, or net asset value, is an important thing to know about mutual funds. The NAV is based on the value of what it is invested in. After the closing bell, every mutual fund’s NAV is recalculated. If a portfolio manager closes off an open-end fund because the NAV is too high then even existing investors are unable to purchase more shares.
Fortress Investment Group has joined other major investment firms in creating an open-ended private credit fund. Both BlackRock and GSO Capital Partners have entered this asset class as well. All three companies are confident about private credit and their ability to profit from it.