Could Nomura’s ambition to expand sales of hedge funds and other investment products in Asia have anything to do with the $888m purchase price of its stake in Fortress? Eight is considered the most fortuitous of numbers in some parts of the region.
Japan’s Nomura will take a 15 per cent stake in Fortress Investment Group, the US alternative investment firm with $26bn under management.
The price, at around 23 per cent of assets under management, is above the 15 to 20 per cent range between which hedge funds valuations are generally thought to lie. But the New York-based group has already set a high benchmark for its own valuation. Fortress made headlines last month when it said it aimed to raise $750m by floating 10 per cent of the company. The listing, which could value Fortress at up to $7.5bn, is seen as the first test of investor appetite for a publicly traded hedge funds and marks the further progress of the funds into the mainstream.
Nomura is the latest bank to buy into the hedge fund arena. Morgan Stanley has snapped up Oxhead Capital, FrontPoint and Brookville Capital this year, and taken stakes in Avenue Capital and Lansdowne. Lehman Brothers took a 5 per cent stake in London fund BlueBay as part of its IPO.
The Japanese bank last month bought US electronic brokerage Instinet, giving it access to nearly 700 hedge fund clients.
