UPDATE 1-Fortress profit soars in second quarter as funds perform
NEW YORK, Aug 1 (Reuters) - Fortress Investment Group's pre-tax distributable earnings rose significantly in the second quarter as strong performance across its various fund offerings led to higher incentive income. New York-based Fortress, one of a handful of publicly traded alternative asset managers, on Thursday reported pre-tax distributable earnings climbing 196 percent to $148 million, or 30 cents per share, from $50 million, or 9 cents per share, a year earlier. It was the strongest quarter of distributable earnings since Fortress' first quarter as a public company, a spokesman said. Pre-tax distributable income is the company's preferred way to measure its performance because it excludes large quarterly compensation costs stemming from the equity interest of principals who took the company public in 2007. The firm announced a second-quarter dividend of 6 cents per share. Fortress said its net loss attributable to Class A Shareholders was $2 million, compared with a year-earlier gain of $5 million. The decline was mainly driven by higher compensation and benefits costs. Meanwhile, incentive income - fees that fund managers earn on top of management fees if their portfolios perform well - jumped about 323 percent to $199 million, from $47 million last year, boosted by solid performance in its hedge and credit fund strategies during the second quarter. The Fortress Macro Funds rose 9.1 percent in the second quarter, while the Fortress Asia Macro Funds climbed 9.8 percent, pushing yearly returns for both portfolios into double-digits. Hedge funds, on average, lost money in the second quarter, according to eVestment. The firm's assets under management fell 2 percent to $54.6 billion at the end of the second quarter. Fortress also said it had appointed Randal Nardone as the company's Chief Executive Officer. Nardone had performed those duties on an interim basis since Daniel Mudd resigned from the post at the end of 2011.