Telecommunications and internet group SoftBank agreed yesterday to acquire US-based investment manager Fortress Investment Group for $3.3bn, giving it stakes in several venture capital-backed companies.
Founded in 1998, Fortress oversees a $70bn portfolio of assets spread across private equity, hedge and credit funds as well as asset management firm Logan Circle Partners.
The firm also maintains a VC portfolio that includes cloud storage provider TriPlay, bitcoin vault creator Xapo and cloud surveillance technology developer SmartVue, and has supplied debt to companies including online lender ZestFinance and cloud infrastructure company DigitalOcean.
The deal will also give SoftBank a stake in Lyft, the ride hailing platform valued at $5.5bn as of late 2015, a few months after Fortress contributed to its series E round. SoftBank already holds a portion of Ola, Grab and Didi Chuxing, and the Lyft stake means it is backing all of Uber’s main competitors worldwide.
SoftBank has the option to bring in partners that will contribute part of the money for the transaction, which will be conducted in cash, but the corporate views the deal as part of an ongoing strategy to grow and diversify its overall holdings as it prepares to launch the $100bn Vision Fund.
Masayoshi Son, SoftBank’s CEO, said: “For SoftBank, this opportunity will immediately help expand our group capabilities, and, alongside our soon-to-be-established SoftBank Vision Fund platform, will accelerate our SoftBank 2.0 transformation strategy of bold, disciplined investment and world class execution to drive sustainable long-term growth.”
Fortress will operate as an independent subsidiary of SoftBank, and principals Pete Briger, Wes Edens and Randy Nardone have agreed to reinvest 50% of their after-tax proceeds from the acquisition in funds or entities managed by Fortress.