Fortress executives see market uncertainty as building block for future opportunities

By Jennifer Lanning Drey

Portland, Ore., Aug. 14 - Fortress Investment Group LLC chief executive officer Wesley R. Edens said he expects the current unstable market conditions to lead to significant prospects when stability returns.

"Our business is an investment business and disruptive and volatile times like this can create terrific investment opportunities," Edens said during the company's second-quarter earnings call held Tuesday.

Edens expects the corporate side of the debt market to stabilize much sooner than the subprime side, with price rectifying the worries of corporate lenders.

"Our view is it's largely a price issue. I expect that given what's happened historically, this is something that should come back to the marketplace in the next month or two and then markets would again be more normal," he said.

"I think the market remains vulnerable in the short term to surprises that could be disruptive, but generally speaking, as investor confidence returns, the market should come back to a more normalized timeframe and thus be once again ready for transactions," he said later in the call.

Fortress' hybrid hedge fund manager Peter L. Briger, Jr. later told listeners on the call that "A liquidity crisis is an opportunistic lender and an asset buyer's best friend."

He further explained that debt has repriced and that will continue to weigh on debt spreads and asset valuations.

"Volatility is, by any historical measure, very high and these factors will all be positive in terms of returns and transaction flows for our special opportunities business," he said.

"Good judgment with respect to asset liability management and emphasis on the fundamentals over the medium and long term will make the current investment market for all assets and credit investors look good in hindsight."

Fortress is a New York-based global alternative asset manager.

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