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Fortress posts fourth quarter loss

Year end results still encouraging

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Fortress Investment Group, which purchased Whistler-Blackcomb‚Äôs parent company Intrawest in 2006, announced a loss for the fourth quarter on Tuesday, March 25 — but watched its stock rise by four per cent based on strong results in a tough market that weathered the collapse of the subprime mortgage market and financial giant Bear Stearns.

Fortress, which went public on Feb. 27, 2007 announced a fourth-quarter net loss of $29.3 million, or 43 cents a share with revenue falling 22 per cent to $196 million. The previous year Fortress posted a net income of $290 million for the fourth quarter.

At the same time Fortress also announced a dividend of 23 cents per share for their first quarter of 2008, reassuring investors that Fortress is on stable ground. They have a good case, with other hedge funds posting their biggest ever losses in January, losing tens of billions in value because of their exposure to the subprime mortgage meltdown.

Year-end results are encouraging. Despite the fourth quarter losses, Fortress reported pre-tax distributable income of $552 million for the year ending Dec. 31, 2007, significantly higher than the $397 million reported for 2006.

However, while that is good news for a hedge fund, exposure on the stock market has been tough on the company. Since its initial public offering in 2007, Fortress shares have sunk from $34 to $11.36 on Wednesday. Management fees have also increased by more than 40 per cent.

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