Fortress wins big off Springleaf
According to Bloomberg, Fortress Investment Group’s bet on subprime lender Springleaf Holdings Inc. (LEAF) has paid off. Fortress invested in Springleaf and Nationstar (NSM) to build out a financial-services business within its private-equity unit. Bloomberg explains:
Fortress, the first publicly traded buyout firm in the U.S., paid $125 million in 2010 for a stake in Springleaf that was valued at $1.68 billion yesterday following the Evansville, Indiana-based lender’s trading debut. Springleaf, which sold 21 million shares at $17 apiece in its initial public offering Oct. 15, gained 13 percent to close at $19.26 in New York.
In addition to Springleaf, Nationstar also proved to be profitable:
The offering deepened New York-based Fortress’s gains from a turnaround in the subprime lending market following the housing collapse. Fortress last year took public Nationstar Mortgage Holdings Inc., a mortgage servicer Fortress had acquired in 2006 for more than $550 million. The stock has more than tripled since then, valuing Fortress’s 75 percent stake at more than $3.4 billion as of yesterday’s close, according to data compiled by Bloomberg.