• Wednesday, February 21, 2024
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BusinessDay

Nomura gets $205 million profit by selling Fortress stake

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Nomura Holdings Inc, Japan’s largest investment bank, said it generated 21 billion yen ($205 million) of profit from the sale of a stake in U.S. asset manager Fortress Investment Group.

Nomura will include the gains in its results for the fourth quarter ending March 31, Kenji Yamashita, a spokesman at the Tokyo-based brokerage, said. The Japanese company sold a 12 percent stake in Fortress for $363.4 million.

The one-time gain may bolster earnings at Nomura, which bought the stake seven years ago, and help offset a potential slump in trading revenue and brokerage commissions as Japan’s stock rally fades.

The Nikkei 225 Stock Average has slid 11 percent this year, the worst performer among developed markets.

Fortress, the first publicly traded alternative-asset manager in the U.S., repurchased the 12 percent stake for $6 a share, according to a statement from the New York-based firm. The stock is still below the $18.50 at which Fortress sold shares to the public in 2007.

The Japanese brokerage bought a 15 percent stake in Fortress in December 2006 for $888 million, paying $16.12 a share to the company’s principal executives, who included co-founders Wes Edens, Bob Kauffman and Randy Nardone, as well as partners Pete Briger and Michael Novogratz.

Fortress, which oversees $58 billion in hedge funds, credit assets and private-equity funds, plummeted in the years after its IPO, reaching a low of 95 cents in December 2008. The stock rose 6 percent on Thursday, the most since April 2013, to close at $8.47 in New York trading.