Key Takeaways
- • Fortress Investment Group is adding an unleveraged sleeve to its Fortress Lending Fund V, aimed at attracting insurance companies and other European institutional investors, according to people familiar with the matter.
- • The firm seeks to raise at least $3 billion for Fortress Lending Fund V, per the people cited by Bloomberg.
- • The leveraged version primarily invests in direct corporate loans; previous vintages of the strategy offered only a leveraged version.
- • Fortress is targeting net internal rates of return of roughly 11% to 14% for the leveraged sleeve and approximately 8% to 9% for the unleveraged sleeve, according to a separate report in the publisher's coverage.
Summary
Fortress Investment Group is adding an insurer-friendly feature to its latest private debt fund, Fortress Lending Fund V, which will primarily invest in direct corporate loans, according to people familiar with the matter who spoke to Bloomberg on condition of anonymity. The alternative asset manager is introducing an unleveraged sleeve alongside the fund's existing leveraged strategy. The move is intended to draw insurance companies as well as other European institutional investors, the people said. Previous vintages of the strategy offered only a single leveraged version.
The firm is seeking to raise at least $3 billion for the fund, the people said. Coverage elsewhere in the publisher's network indicates that Fortress is targeting net internal rates of return of around 11% to 14% for the leveraged sleeve and approximately 8% to 9% for the unleveraged version. The structure is designed specifically to accommodate the capital constraints and return requirements of insurers, which often favor unlevered exposures for regulatory capital treatment.
The launch fits within a broader push by Fortress into insurance-linked and private credit markets. The publisher's related coverage notes that Fortress recently made a $130 million minority investment in Nassau Financial Group for a 7.7% stake in the annuity company. The firm is also seeking about $1 billion for a litigation finance fund and has announced a $1.5 billion forward-flow agreement to fund small businesses. Fortress has additionally sought up to $8 billion for a new credit opportunities fund targeting distressed securities, financial institutions, specialty finance companies and structured credit.
The details above are based on sourced reporting and the fund's terms may change before any final close.
The firm is seeking to raise at least $3 billion for the fund, the people said. Coverage elsewhere in the publisher's network indicates that Fortress is targeting net internal rates of return of around 11% to 14% for the leveraged sleeve and approximately 8% to 9% for the unleveraged version. The structure is designed specifically to accommodate the capital constraints and return requirements of insurers, which often favor unlevered exposures for regulatory capital treatment.
The launch fits within a broader push by Fortress into insurance-linked and private credit markets. The publisher's related coverage notes that Fortress recently made a $130 million minority investment in Nassau Financial Group for a 7.7% stake in the annuity company. The firm is also seeking about $1 billion for a litigation finance fund and has announced a $1.5 billion forward-flow agreement to fund small businesses. Fortress has additionally sought up to $8 billion for a new credit opportunities fund targeting distressed securities, financial institutions, specialty finance companies and structured credit.
The details above are based on sourced reporting and the fund's terms may change before any final close.
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