I think how we are being valued right now is ridiculous, and over time we hope these valuations are a lot better., Fortress isnt the only alternative-investment firm whose share price has taken a beating. Peter Lionel Briger Jr. is the Principal & the Co-Chairman of Directors - Fortress Investment Group LLC at Drive Shack Inc. Mr Jr is 57, he's been the Principal & the Co-Chairman of Directors - Fortress Investment Group LLC of Drive Shack Inc since . But though he is strong-willed, Briger believes he works well with others. At the peak, the most coveted space rented for more than $200 per square foot. It also paid $156million for a $751.4million student loan portfolio from CIT. Edens is tall and polished; Briger is stocky and brusque. In every case, the strategy was to buy assets that had fallen out of favor with mainstream sources of capital. Last year the firm acquired Logan Circle Partners, a traditional long-only fixed-income manager based in Philadelphia and Summit, New Jersey, with $12.9billion in assets. Peter Briger is a 43-year-old personality who is well known for his achievements. Peter L. Briger, Jr. Starting in 2004, Marc Dreier, a New Yorkbased attorney and founding partner of his eponymous law firm, began offering structured notes he claimed were being sold by Solow Realty & Development Co., the real estate firm operated by Sheldon Solow, his longtime client. Some hedge-fund managers defend the loss of 18 percent of investors money as trouncing the S&P 500, which lost 37 percent in 2008. What is the net worth of Jon Najarian? I remember telling Pete I wanted to run that business, he says. Mr. Briger is responsible for the Credit and Real Estate business at Fortress. We invest in areas where the main money flows dont go, Briger, 47, told Institutional Investor during a series of exclusive interviews over the past four months. That event made it official: Peter Briger Jr. was a billionaire. (As recently as five years ago, the standard was 1 and 20.) Today they look like arrogant showboats, and their story helps explain why hedge funds are imploding by the thousandsand why theres still a truckload of money to be made. He had run across Edens when the latter was working on the loan desk at Lehman Brothers Holdings and gotten to know him when he was running private equity at BlackRock. But Briger dismisses the financial motivation, pointing out that all of the partners were already very well off. One manager, who posted a loss of more than 20 percent last year, says that 82 percent of his investors have been with him for more than five years. You'll get two premium trades per week in Smart Spreads. Harry paid them back. Its also worth noting that, despite all the problems in hedge-fund land and the clamor for more regulation (and there will be more regulation), you dont see any hedge-fund managers in Washington with their hands outstretched for a piece of the bailout pie. Even though Fortresss prognosis for the housing market in countries like Spain is not good, Briger and his team are confident that they can make money given what they paid for the businesses and their experience at servicing similar loans. In addition, David Kabiller, a principal at AQR Capital Managementa roughly $20 billion hedge fund founded by Goldman Sachs alums Kabiller, Cliff Asness, John Liew, and Robert Krailpoints out that there isnt any way to measure most hedge funds. There are rumors that the principals might, as Cooperman predicted, buy their company back from the public. Part of the growing Occupy Wall Street movement, the protesters are a reaction to the worsening economic malaise in the U.S. and the role the banking industry played in creating it. No silver lining in any of this cloud, says a hedge-fund trader. And more! In Hong Kong, Novogratz was heading up Goldmans trading and risk management for fixed income, currencies and commodities. The talks, though serious, eventually went nowhere. In the later years of the hedge-fund explosion, there werent any serious tests of a managers prowess, because it was so easy to make money. While the five principals are seen by their colleagues as extremely smartthese are not B-team guys, says onein recent years it was hard to lose, and Fortress, like its peers, charged rich fees. This summer, when he moved the credit business to San Francisco, largely for personal reasons his wife is from the Bay Area he brought about 30 members of the senior investment and treasury team, including Furstein, with him. Hell, one hedge-fund manager puts it succinctly. Brigers investing prowess has earned him respect and friends in high places. One manager tells me that he has a debt security that he is valuing at 50 cents on the dollar. People may also try to redeem in order to pay their taxes. The most recent stock trade was executed by Hana Khouri on 16 May 2022, trading 14,500 units of DS stock currently worth $25,085. Briger resigned three days later. Cuomo told the assembled managers that, if he were an investor, he would have sold housing-related stocks short as well. Briger currently owns just north of 44 million shares worth roughly $350 million and more. I have almost no money with anyone outside my own firm, but I do have money with Pete.. Peter Briger Jr. and Michael Novo Novogratz, who joined Fortress in 2002. Fortresss stock, which had sunk to $10 by August 2008, should have been a sign that the tide was going out. Fortress was one of about 15 hedge fund firms that had money with Dreier. Payouts Up. Briger returned to New York to join Michael Mortara, his mentor and close friend, at GSVentures, a new Goldman initiative set up to invest venture capital in financial services companies. Elected as co-chairman of the board in 2009, Pete Briger has guided the firm's operations in various . It is a safe bet that not a single one of the protesters would recognize Briger for what he is: a titan of finance. The only additional compensation theyd receive would be through dividends and stock-price appreciation effectively tying their financial fates to the success of the companys shares. Advisory Partner. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Time and again, Briger and his teams delivered. His specialty, though, has always been distressed debt. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Cond Nast. Now they wont return your phone call., Nor is it clear when the purge will be over. Today, Blackstone trades at about $14 a share, having gone public at $31, and Och-Ziff is at about $10 after a high of $32. Making money seemed to be simple for Fortress. Operating out of New York, Mul provided corporate credit expertise. (One manager who was at the event emphasizes that Cuomo had targeted only illegal short-selling, and was right to launch an investigation into that.). Do the math, says another veteran Wall Streeter. In 1993, he left abruptly, as the press described it, due to philosophical differences with management. He joined a prestigious money-management firm called BlackRock, split to spend a short year at the Swiss bank UBS, and then set up his own shopFortress. Pete is responsible for the Credit and Real Estate business at Fortress where he has been a member of the Management Committee since 2002 and a member of the board of directors since November 2006. By late 2007, Fortress was doing less and less in commercial lending, and it had little presence in the mortgage market. It is the stupidest thing I have ever seen my industry do, says Jim Chanos, who runs a well-known hedge-fund firm called Kynikos Associates, which specializes in short-selling. SAC Capital founder and chief Steven Cohen, whose fabulous art collecton includes works by Picasso and Pollock. Briger attended a private grammar school in New York. It all begs a fairly simple question, which is: How could there have been as many great investors as there were hedge funds being started? While there are complaints that the Fortress principals are arrogant, there are clearly a lot of people who are willing to trust them with their hard-earned cash. True, but that wasnt supposed to be the goal. The Motley Fool has a disclosure policy. Briger arrived in Asia in early 1998, bringing with him deputies Mark McGoldrick and Robert Kissel. By October, he was down 26 percent. The Fortress Drawbridge funds invest mostly in private credit loans and debt that trade through private transactions though they can also invest in public bonds and structured credits, including mortgage-backed securities and collateralized loan obligations. Following high school he majored in history at Princeton. For old-timers, it was all a shock. He had previously worked on the distressed-bank-debt trading desk at Goldman. He needs to be. It is a business of discipline. Its offices on the 46th floor of 1345 Avenue of the Americas, four blocks from the park, cost some $8.4 million in rent in 2007, but the building is considered more corporate than high hedge-fund style.) Briger now owns just north of 44 million shares worth about $350 million. We have bet on ourselves more than anyone else has., To go with their bravado, they lived a normal lifestylethat is, normal by the rarefied standards of those who made their fortunes in finance. Initially, he operated out of a windowless office and figured that if things went well he might one day net some $200,000 annually from his management and performance fees. He is married and has four children. This is due to his great charm and his embrace of a lifestyle that more than one person calls lunaticthey mean it as a complimentdue to his love of partying. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. It was the hedge-fund community of New York, he recalls. The former lawyer is now serving 20 years for fraud at the Federal Correctional Institution at Sandstone, Minnesota. Briger was uncertain whether the trios plan would work in a hedge fund structure. Fortress, which both runs hedge funds and makes private-equity investments, was part of the seemingly miraculous wave of money begetting more money, in which people who managed others fortunes made even greater fortunes for themselves. When Briger graduated from Princeton, in 1986, problems in the U.S. savings and loan market were just coming to a head. The redemption requests, combined with the investment losses, would have brought down Novogratzs fund, which had $8 billion in assets on September 30, to just $3.65 billion. We are the whipping boys, says one executive. Employees, even the most senior, habitually refer to Petes business. Defections to other firms are rarely tolerated. Two of Fortresss main competitors, New Yorkbased CIT and Ally, have been forced to retrench and exit some businesses after overexpanding in the period leading up to the financial crisis. By mid-October, rumors that Citadelwhich also depended on debtwas in trouble began to sweep through the market. Sensing Macklowes vulnerability, some of his rivals approached Fortress and offered to buy the loan, a move that could have given them control of the property developers empire. On October 24, more than 1,000 listeners crowded onto a conference call in which Citadel said that its two largest funds were down 35 percent due to the unprecedented de-leveraging that took place around the world, as C.F.O. another fund manager disappears.) The firm actually had fresh capital it could draw on to take advantage of the massive repricing of risk assets that was suddenly under way. When he arrived, he battled for elevator space with other hedge-fund managers. Long live the hedge-fund king. Bad jokes about cracks in the Fortress and pulling up the Drawbridge are now making the rounds on the Street. Theyre not MAGA. Fortresss diversification strategy has been far less effective since the financial crisis. The idea was that a hedge fund limited your exposure to market risks, as Fortress puts it in financial filings. The potential for tensions among the partners has been heightened by the dismal performance of Fortress as a publicly traded company, although, to be fair, its problems have been far from unique in the financial services industry. He also owns two de Koonings that he bought from DreamWorks co-founder David Geffen for $63 million and $137.5 million, respectively, as well as works by Picasso, Warhol, Pollock, and Munch. Fortress Investment Group's Junkyard Dogs. Briger has been a member of the Management Committee of Fortress since 2002. At Fortress, such fees for all of its businesses totaled over $1 billion in 2007, more than double than in 2005. There was a huge amount of ambition to turn these entrepreneurial businesses into something more permanent. Use of this site constitutes acceptance of our User Agreement and Privacy Policy and Cookie Statement and Your California Privacy Rights. In response, some managers began to hunt off the beaten paths and buy more exotic stuffstakes in private Chinese companies, or securities based on mortgages, for instancethat wasnt as liquid (meaning it couldnt be sold as easily) as a stock. In the coming year, private-equity firms will ask investors to pony up more capital, which will force more redemptions from hedge funds. The new dream job is a salary, health care, and Jamie Dinan buys you lunch every day., Five years ago, if youd gone to start a fund, people would have fought over you, says another manager. Peter Briger attributes his main source of wealth to the fortress investment group. Novogratz had ended his Goldman career as head of Latin America in 2000, and by late 2001 he was anxious to start working again. Hed be the first to say that he doesnt cure cancer or teach kids to read, but as he puts it, I do take pensioners money and try to give them back a good return.. Photograph by Gasper Tringale.|||. The entire industry is reeling as investors pull billions from funds that have lost billions. In the first quarter of this year, Briger's team successfully raised $4.7 billion for a new fund called "Fortress Credit Opportunities Fund IV." We thought that having that public name would give us branding more quickly and do more things and potentially make more money for the business, he explains. The Japanese conglomerate's discussions in connection with the asset manager are currently in the initial stage, Bloomberg reported citing people with the knowledge of the matter. . In order to do so, they had to sell their long positions and get out of the short positions, driving down the price of the former and driving up the price of the latterthereby exacerbating the selling pressure. The 42 Best Romantic Comedies of All Time, The 25 Best Shows on Netflix to Watch Right Now, King Charles Reportedly Began Evicting Meghan and Harry the Day After, How Screwed Are Donald Trump and His Adult Children, and Other Questions You Might Have About the Staggering Fraud Lawsuit Against Them. Meanwhile, opportunity abounds. I thought Wes was the smartest guy in my business, Briger says. Peter earns over 100 million dollars in net cash payout since 2005. His schoolmate Briger went to Goldman, where he traded mortgages. Making the world smarter, happier, and richer. Given his teams background, he felt confident they could get the deal done. The groups, respectively, had $16billion, $9.5billion and $7.1billion in assets under management. Over the last 6 years, insiders at Drive Shack Inc have traded over $149,933 worth of Drive Shack Inc stock and bought 9,690,719 units worth $25,544,970 The Dodd-Frank regulatory reform legislation forces banks to hold high-quality assets on the books by requiring huge capital reserves against assets deemed risky. In 2004 the credit business delivered the largest distributable earnings, followed by private equity in 2005 and the liquid hedge fund business in 2006. After graduating, Briger worked at Goldman, , and co. For 15 . Drive Shack Inc executives and other stock owners filed with the SEC include: Track performance, allocation, dividends, and risks, Annotate, download XLSX & look up similar tables, Filter, compare, and track coins & tokens, Stocks and cryptocurrency portfolio tracker. The flagship hedge fund run by Steve Mandel of Lone Pine Capital, one of the most respected managers, was down 32 percent last year. The 2004 purchase of hedge fund firm Highbridge Capital Management by JPMorgan Chase & Co. had shown one way, but another tantalizing option was to do a public share offering.