Fortress Investment Group, a listed alternative investor with $40bn under management, is taking action aimed at keeping two of the companies it owns afloat. Fortress’s difficulties will be closely followed in the financial world because they herald similar problems for other private equity firms and hedge funds. Fortress is battling to preserve the value of its investments in Intrawest, a ski resort company based in Canada that has $1.68bn in debt due on Oct 23, and Gagfah, a German residential real estate group that is seeking to raise additional equity to comply with the terms of its debt. Fortress controls Intrawest via a $1.37bn equity stake. With Intrawest’s debt trading at less than 70 cents on the dollar, Fortress has approached potential and existing lenders to discuss a refinancing involving $1.4bn in senior debt. Fortress is putting in $100m of additional capital to preserve its equity’s value. Meanwhile, investors in another Fortress vehicle were asked to provide additional capital to safeguard their investments in Gagfah.

This entry was posted by Gwen Robinson on Friday, October 17th, 2008 at 5:29 and is filed under Capital markets, M&A, Private equity. Tagged with fortress, Gagfah, Intrawest. Edit this entry.