8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 1, 2010 (February 25, 2010)

Fortress Investment Group LLC

(Exact name of registrant as specified in its charter)

Delaware	001-33294	20-5837959
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
1345 Avenue of the Americas, 46th Floor New York, New York		10105
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (212) 798-6100

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operation and Financial Condition.

On February 25, 2010, Fortress Investment Group LLC (the “Company”) issued a press release announcing the Company’s results for its fourth fiscal quarter and full fiscal year ended December 31, 2009. In addition, on February 25, 2010, the Company held a conference call open to the public on which management discussed the Company’s results of operation for its fourth fiscal quarter and full fiscal year ended December 31, 2009.

A copy of the Company’s press release is attached to this Current Report on Form 8-K (the “Current Report”) as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 2.02 disclosure. A transcript of the Company’s conference call is attached to this Current Report as Exhibit 99.2 and is incorporated herein solely for purposes of this Item 2.02 disclosure.

This Current Report, including the exhibits attached hereto, is being furnished and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, unless expressly set forth as being incorporated by reference into such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press release, dated February 25, 2010, issued by Fortress Investment Group LLC.
99.2	Transcript of Conference Call held by Fortress Investment Group LLC on February 25, 2010.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FORTRESS INVESTMENT GROUP LLC

(Registrant)

/S/    DAVID N. BROOKS        

David N. Brooks

General Counsel

Date: March 1, 2010

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release, dated February 25, 2010, issued by Fortress Investment Group LLC.
99.2	Transcript of Conference Call held by Fortress Investment Group LLC on February 25, 2010.

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EX-99.1

Exhibit 99.1

Contact:

Lilly H. Donohue

212-798-6118

Fortress Reports Fourth Quarter & Year End 2009 Financial Results

Full Year 2009 Highlights

• Assets under management of $31.8 billion as of December 31, 2009

• Raised $1.4 billion of new third-party capital

• Fund management distributable earnings of $208 million

• Pre-tax distributable earnings (DE) of $126 million

• GAAP net income, excluding principals agreement compensation, of $43 million. GAAP net loss of $909 million. GAAP net loss attributable to Class A Shareholders of $255 million

Fourth Quarter Highlights

• Fund management distributable earnings of $60 million

• Pre-tax distributable earnings (DE) of $1 million

• GAAP net loss, excluding principals agreement compensation, of $21 million. GAAP net loss of $261 million. GAAP net loss attributable to Class A Shareholders of $84 million

Subsequent Events in the First Quarter 2010

• Fortress was issued an investment grade rating of BBB from Fitch and BBB- from S&P, in each case with a stable outlook

New York, NY. February 25, 2010 – Fortress Investment Group LLC (NYSE: FIG) today reported its year end and fourth quarter 2009 results.

Full Year 2009

For the year ended December 31, 2009, our GAAP net loss was $909 million versus a loss of $1,221 million for 2008. Our GAAP net loss attributable to Class A Shareholders was $255 million, or $2.08 loss per diluted share, as compared to a loss of $322 million, or $3.50 loss per diluted share, for the year ended December 31, 2008. Excluding principals agreement compensation, full year 2009 GAAP net income was $43 million, up from a net loss of $266 million in 2008.

For 2009, fund management distributable earnings was $208 million compared to $216 million in 2008.

Pre-tax DE for 2009 was $126 million, or $0.26 per dividend paying share/unit, versus a loss of $162 million, or $0.36 loss per dividend paying share/unit, for 2008.

Fourth Quarter 2009

For the quarter ended December 31, 2009, our GAAP net loss was $261 million compared to a loss of $426 million for fourth quarter 2008. Our GAAP net loss attributable to Class A Shareholders was $84 million, or $0.58 loss per diluted share, as compared to a loss of $140 million, or $1.50 loss per diluted share, for the fourth quarter 2008. Excluding principals agreement compensation, fourth quarter GAAP net loss was $21 million, up from a net loss of $187 million for fourth quarter 2008.

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For the fourth quarter, fund management distributable earnings was $60 million compared to $7 million in the fourth quarter of 2008.

Pre-tax DE for the fourth quarter was $1 million versus a loss of $258 million for the fourth quarter of 2008.

The table below details Fortress’s GAAP Net Income (Loss) and Distributable Earnings for the full year and fourth quarter 2009 and 2008:

	Full Year						$ Change			Fourth Quarter						$ Change
(in millions, except per share amount)	2009			2008						2009			2008
GAAP
Net income (loss)	$	(909	)	$	(1,221	)	$	312		$	(261	)	$	(426	)	$	165
Net income (loss) attributable to Class A Shareholders	$	(255	)	$	(322	)	$	67		$	(84	)	$	(140	)	$	56
Per diluted share	$	(2.08	)	$	(3.50	)	$	1.42		$	(0.58	)	$	(1.50	)	$	0.92
Net income (loss) excluding principals agreement compensation	$	43		$	(266	)	$	309		$	(21	)	$	(187	)	$	166
Distributable Earnings
Fund management DE	$	208		$	216		$	(8	)	$	60		$	7		$	53
Pre-tax DE	$	126		$	(162	)	$	288		$	1		$	(258	)	$	259
Per dividend paying share/unit	$	0.26		$	(0.36	)	$	0.62		$	0.00		$	(0.56	)	$	0.56
Weighted Average Dividend Paying Shares and Units Outstanding		492			453						511			462

For reconciliations of non-GAAP measures, please see Exhibit 2, “Reconciliation of Fund Management DE to Pre-tax Distributable Earnings and GAAP Net Income (Loss) and Reconciliation of Segment Revenues to GAAP Revenues,” Exhibit 3, “Reconciliation of GAAP Net Income (Loss) Excluding Principals Agreement Compensation to GAAP Net Income (Loss)” and Exhibit 4, “Reconciliation of Weighted Average Class A Shares Outstanding (Used for Basic EPS) to Weighted Average Dividend Paying Shares and Units Outstanding (Used for DEPS)” at the end of this release. Distributable earnings is a supplemental measure of our operating performance that we believe provides a meaningful basis for comparison between present and future periods.

The Company’s quarterly segment revenues and distributable earnings will fluctuate materially depending upon the performance of our funds and the realization events within our private equity businesses, as well as other factors. Accordingly, the revenues and profits in any particular quarter should not be expected to be indicative of future results.

The following discussion of our results is based on segment reporting as presented in our Annual Report on Form 10-K. Our GAAP statement of operations and balance sheet are presented following this discussion. The following table is a summary presentation of our segment performance with supplemental data provided for informational purposes.

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Supplemental Data for Fourth Quarter 2009 and 2008:

	Three Months Ended December 31, 2009
	Total			Private Equity						Liquid Hedge Funds			Hybrid Funds						Principal Investments
(in millions)				Funds			Castles						Hedge Funds			PE Funds
Assets Under Management
AUM - October 1, 2009	$	32,000		$	11,057		$	3,279		$	4,483		$	9,830		$	3,351		$	—
Capital raised		616			—			—			409			—			207			—
Capital acquisitions		—			—			—			—			—			—			—
Increase in invested capital		503			9			—			—			—			494			—
Redemptions 1,2		(1,059	)		—			—			(765	)		(294	)		—			—
Return of capital distributions		(789	)		(53	)		—			—			(20	)		(716	)		—
Equity buyback		—			—			—			—			—			—			—
Crystallized Incentive Income		(7	)		—			—			(7	)		—			—			—
Income (loss) and foreign exchange		498			331			(47	)		177			26			11			—
AUM - Ending Balance	$	31,762		$	11,344		$	3,232		$	4,297		$	9,542		$	3,347		$	—
Third-Party Capital Raised	$	677		$	—		$	—		$	409		$	—		$	268		$	—
Segment Revenues
Management fees	$	100		$	22		$	13		$	19		$	33		$	13		$	—
Incentive income		57			36			—			5			1			15			—
Total		157			58			13			24			34			28			—
Segment Expenses
Operating expenses		(70	)		(11	)		(8	)		(18	)		(27	)		(6	)		—
Profit sharing compensation expenses		(26	)		(13	)		—			(4	)		(1	)		(8	)		—
Unallocated Expenses		(1	)
Total		(97	)		(24	)		(8	)		(22	)		(28	)		(14	)		—
Fund Management DE		60			34			5			2			6			14			—
Investment Income		(55	)																	(55	)
Interest Expense		(4	)																	(4	)
Pre-tax Distributable Earnings	$	1		$	34		$	5		$	2		$	6		$	14		$	(59	)

	Three Months Ended December 31, 2008
	Total			Private Equity						Liquid Hedge Funds			Hybrid Funds						Principal Investments
(in millions)				Funds			Castles						Hedge Funds			PE Funds
Assets Under Management
AUM - October 1, 2008	$	34,289		$	11,696		$	3,227		$	9,104		$	8,221		$	2,041		$	—
Capital raised		28			—			—			16			12			—			—
Increase in invested capital		1,901			786			—			—			1			1,114			—
Redemptions		(1,198	)		—			—			(1,198	)		—			—			—
Return of capital distributions		(537	)		(69	)		(28	)		—			(3	)		(437	)		—
Equity buyback		—			—			—			—			—			—			—
Crystallized Incentive Income		—			—			—			—			—			—			—
Income (loss) and foreign exchange		(5,029	)		(2,106	)		(17	)		(753	)		(1,737	)		(416	)		—
AUM - Ending Balance	$	29,454		$	10,307		$	3,182		$	7,169		$	6,494		$	2,302		$	—
Segment Revenues
Management fees	$	147		$	43		$	13		$	48		$	36		$	7		$	—
Incentive income		(107	)		(107	)		—			—			—			—			—
Total		40			(64	)		13			48			36			7			—
Segment Expenses
Operating expenses		(64	)		(5	)		(9	)		(19	)		(26	)		(5	)		—
Profit sharing compensation expenses		32			35			(1	)		(4	)		2			—			—
Unallocated Expenses		(1	)
Total		(33	)		30			(10	)		(23	)		(24	)		(5	)		—
Fund Management DE		7			(34	)		3			25			12			2			—
Investment Income		(255	)																	(255	)
Interest Expense		(10	)																	(10	)
Pre-tax Distributable Earnings	$	(258	)	$	(34	)	$	3		$	25		$	12		$	2		$	(265	)

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Supplemental Data for Full Year 2009 and 2008:

	Year Ended December 31, 2009
				Private Equity						Liquid Hedge Funds			Hybrid Funds						Principal Investments
(in millions)	Total			Funds			Castles						Hedge Funds			PE Funds
Assets Under Management
AUM - January 1, 2009	$	29,454		$	10,307		$	3,182		$	7,169		$	6,494		$	2,302		$	—
Capital raised		1,318			—			—			704			—			614			—
Capital acquisitions 3		3,310			—			—			—			3,310			—			—
Increase in invested capital		1,348			79			—			1			2			1,266			—
Redemptions 1,2		(5,207	)		—			—			(4,481	)		(726	)		—			—
Return of capital distributions		(1,682	)		(170	)		—			—			(36	)		(1,476	)		—
Equity buyback		—			—			—			—			—			—			—
Reset Date		—			—			—			—			—			—			—
Crystallized Incentive Income		(7	)		—			—			(7	)		—			—			—
Income (loss) and foreign exchange		3,228			1,128			50			911			498			641			—
AUM - Ending Balance	$	31,762		$	11,344		$	3,232		$	4,297		$	9,542		$	3,347		$	—
Third-Party Capital Raised	$	1,379		$	—		$	—		$	704		$	—		$	675		$	—
Segment Revenues
Management fees	$	424		$	131		$	50		$	80		$	123		$	40		$	—
Incentive income		75			36			—			14			2			23			—
Total		499			167			50			94			125			63			—
Segment Expenses
Operating expenses		(243	)		(38	)		(29	)		(57	)		(97	)		(22	)		—
Profit sharing compensation expenses		(47	)		(13	)		—			(16	)		(6	)		(12	)		—
Unallocated Expenses		(1	)
Total		(291	)		(51	)		(29	)		(73	)		(103	)		(34	)		—
Fund Management DE		208			116			21			21			22			29			—
Investment Income		(58	)																	(58	)
Interest Expense		(24	)																	(24	)
Pre-tax Distributable Earnings	$	126		$	116		$	21		$	21		$	22		$	29		$	(82	)
	Year Ended December 31, 2008
	Total			Private Equity						Liquid Hedge Funds			Hybrid Funds						Principal Investments
(in millions)				Funds			Castles						Hedge Funds			PE Funds
Assets Under Management
AUM - January 1, 2008	$	32,930		$	12,643		$	3,328		$	8,128		$	8,196		$	635		$	—
Capital raised		5,124			745			—			2,827			1,385			167			—
Increase in invested capital		4,430			1,804			—			—			27			2,599			—
Redemptions		(2,275	)		—			—			(1,804	)		(471	)		—			—
Return of capital distributions		(921	)		(366	)		(28	)		—			(13	)		(514	)		—
Equity buyback		(31	)		—			(31	)		—			—			—			—
Crystallized Incentive Income		(110	)		—			—			(15	)		(95	)		—			—
Income (loss) and foreign exchange		(9,693	)		(4,519	)		(87	)		(1,967	)		(2,535	)		(585	)		—
AUM - Ending Balance	$	29,454		$	10,307		$	3,182		$	7,169		$	6,494		$	2,302		$	—
Segment Revenues
Management fees	$	598		$	163		$	54		$	218		$	148		$	15		$	—
Incentive income		(63	)		(94	)		—			17			14			—			—
Total		535			69			54			235			162			15			—
Segment Expenses
Operating expenses		(289	)		(31	)		(34	)		(97	)		(115	)		(12	)		—
Profit sharing compensation expenses		(29	)		27			(5	)		(42	)		(9	)		—			—
Unallocated Expenses		(1	)
Total		(319	)		(4	)		(39	)		(139	)		(124	)		(12	)		—
Fund Management DE		216			65			15			96			38			3			—
Investment Income		(338	)																	(338	)
Interest Expense		(40	)																	(40	)
Pre-tax Distributable Earnings	$	(162	)	$	65		$	15		$	96		$	38		$	3		$	(378	)

¹ Subsequent to year end, the liquid hedge funds had redemption payouts of approximately $0.7 billion in January 2010. Approximately $0.5 billion of this amount consisted of distributions from Macro Funds’ SPVs.

² The hybrid hedge funds, which have an annual notice date for redemptions, have received redemption notices effective December 31, 2009 of approximately $1.5 billion, using December 31, 2009 values. This amount is subject to change based on performance. For primarily all of these funds, redemptions will be paid out over time as the underlying investments are liquidated, in accordance with the governing documents of the applicable funds.

³ Includes $3.3 billion of capital under management due to Fortress’s takeover of management of the D.B. Zwirn funds and related investment vehicles.

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Overview

We managed $31.8 billion of assets in private equity funds, liquid hedge funds and hybrid funds as of December 31, 2009. Fortress’s revenues consist of (i) management fees, which are based on the size of our funds, (ii) incentive income, which is based on the performance of our funds, and (iii) investment income (loss), which is based on our principal investments.

In 2009, we generated fund management DE of $208 million. Including principal investments, Fortress generated pre-tax distributable earnings of $126 million.

For the year ended December 31, 2009, the private equity segments accounted for approximately 43% of total segment revenues, the liquid hedge funds segment accounted for approximately 19% of total segment revenues and the hybrid funds segments accounted for approximately 38% of total segment revenues.

In 2009, the private equity, liquid hedge funds and hybrid funds businesses accounted for approximately 66%, 10% and 24%, respectively, of total fund management DE.

In the fourth quarter of 2009, we generated fund management DE of $60 million. Including principal investments, Fortress generated pre-tax distributable earnings of $1 million.

For the quarter ended December 31, 2009, the private equity segments accounted for approximately 45% of total segment revenues, the liquid hedge funds segment accounted for approximately 15% of total segment revenues and the hybrid funds segments accounted for approximately 40% of total segment revenues.

For the quarter ended December 31, 2009, the private equity, liquid hedge funds and hybrid funds businesses accounted for approximately 64%, 3% and 33%, respectively, of total fund management DE.

Private Equity – Funds

For 2009, the Company’s private equity funds generated pre-tax DE of $116 million compared to $65 million for 2008.

For the quarter ended December 31, 2009, the Company’s private equity funds had pre-tax DE of $34 million compared to pre-tax DE loss of $34 million for the quarter ended December 31, 2008.

Assets under management for private equity funds was $11.3 billion at December 31, 2009 compared to $10.3 billion at December 31, 2008.

Private Equity – Castles

For 2009, the Company’s Castles generated pre-tax DE of $21 million compared to $15 million for 2008.

For the quarter ended December 31, 2009, the Company’s Castles generated pre-tax DE of $5 million compared to $3 million for the quarter ended December 31, 2008.

Assets under management for the Castles was $3.2 billion at December 31, 2009 compared to $3.2 billion at December 31, 2008.

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Liquid Hedge Funds

For 2009, the Company’s liquid hedge fund business generated pre-tax DE of $21 million as compared to $96 million for 2008.

For the quarter ended December 31, 2009, the Company’s liquid hedge fund business generated pre-tax DE of $2 million compared to $25 million for the quarter ended December 31, 2008.

Assets under management for the liquid hedge funds was $4.3 billion at December 31, 2009 compared to $7.2 billion at December 31, 2008. Subsequent to quarter end, the liquid hedge funds had redemption payouts of approximately $0.7 billion in January 2010. Approximately $0.5 billion of this amount consisted of distributions from Macro Funds’ SPVs.

The following table shows our Assets Under Management by fund:

(dollars in billions)	December 31, 2009		December 31, 2008
Macro Funds 4	$	3.4	$	6.1
Fortress Commodities Funds 5	$	0.9	$	1.1

The following table shows our gross and net returns by fund: ⁶

	Three Months Ended December 31, 2009		Year Ended December 31, 2009		Estimated Month Ended January 31, 2010
Gross Returns
Fortress Macro Offshore Fund L.P. 7	3.9	%	13.7	%	2.4	%
Drawbridge Global Macro Fund Ltd	4.4	%	26.5	%	2.3	%
Fortress Commodities Fund L.P.	3.2	%	11.0	%	3.5	%
Net Returns
Fortress Macro Offshore Fund L.P. 7	2.7	%	9.8	%	1.8	%
Drawbridge Global Macro Fund Ltd	3.9	%	24.2	%	2.1	%
Fortress Commodities Fund L.P.	2.0	%	7.3	%	2.7	%

Hybrid – Hedge Funds

For 2009, the Company’s hybrid hedge fund business generated pre-tax DE of $22 million as compared to $38 million for 2008.

For the quarter ended December 31, 2009, the Company’s hybrid hedge fund business generated pre-tax DE of $6 million compared to $12 million for the quarter ended December 31, 2008.

Assets under management for the hybrid hedge funds was $9.5 billion at December 31, 2009 compared to $6.5 billion at December 31, 2008. The hybrid hedge funds, which have an annual notice date for redemptions, have

⁴ Combined AUM for Fortress Macro Onshore Fund LP, Fortress Macro Offshore Fund L.P., Fortress Macro Fund Ltd, Fortress Macro managed accounts, Drawbridge Global Macro Fund L.P., Drawbridge Global Macro Intermediate Fund L.P., Drawbridge Global Macro Alpha Intermediate Fund L.P., DBGM Offshore Ltd, DBGM Onshore LP, DBGM Alpha V Ltd and Drawbridge Global Macro managed accounts.

⁵ Combined AUM for Fortress Commodities Fund L.P. and Commodities managed accounts.

⁶ The performance data contained herein reflects returns for a “new issue eligible,” single investor class as of the close of business on the last day of the relevant period. Gross returns reflect performance data prior to management fees borne by the Fund and incentive allocations while net returns reflect performance data after taking into account management fees borne by the Fund and incentive allocations.

⁷ The date of inception of the Fund was May 1, 2009.

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received redemption notices effective December 31, 2009 of approximately $1.5 billion, using December 31, 2009 values. This amount is subject to change based on performance. For primarily all of these funds, redemptions will be paid out over time as the underlying investments are liquidated, in accordance with the governing documents of the applicable funds. During this period, such amounts continue to be subject to management fees and, as applicable, incentive income.

The following table shows our Assets Under Management by fund:

(dollars in billions)	December 31, 2009		December 31, 2008
Drawbridge Special Opportunities Funds 8	$	5.2	$	5.0
Fortress Partners Funds 9	$	1.9	$	1.5
Fortress Value Recovery Funds 10	$	2.5		N.A.

The following table shows our gross and net returns by fund:¹¹

	Three Months Ended December 31, 2009		Year Ended December 31, 2009
Gross Returns
Drawbridge Special Opportunities LP 12	6.3	%	27.5	%
Drawbridge Special Opportunities Ltd 12	7.9	%	32.6	%
Fortress Partners Fund LP	5.1	%	18.0	%
Fortress Partners Offshore Fund LP	6.0	%	20.2	%
Net Returns
Drawbridge Special Opportunities LP 12	5.8	%	25.0	%
Drawbridge Special Opportunities Ltd 12	7.4	%	30.0	%
Fortress Partners Fund LP	4.8	%	16.7	%
Fortress Partners Offshore Fund LP	5.7	%	18.9	%

Hybrid – Private Equity Funds

For 2009, the Company’s hybrid private equity fund business generated pre-tax DE of $29 million as compared to $3 million for 2008.

For the quarter ended December 31, 2009, the Company’s hybrid private equity fund business generated pre-tax DE of $14 million as compared to $2 million for the quarter ended December 31, 2008.

Assets under management for the hybrid private equity funds was $3.3 billion at December 31, 2009 compared to $2.3 billion at December 31, 2008.

⁸ Combined AUM for Drawbridge Special Opportunities Fund Ltd, Drawbridge Special Opportunities Fund LP and Drawbridge Special Opportunities Fund managed accounts.

⁹ Combined AUM for Fortress Partners Offshore Fund LP and Fortress Partners Fund LP.

¹⁰ Fortress will receive management fees from these funds equal to 1% of cash receipts and up to 1% per annum on certain managed assets, subject to collectability, and may receive limited incentive income if aggregate realizations exceed an agreed threshold.

¹¹ The performance data contained herein reflects returns for a “new issue eligible,” single investor class as of the close of business on the last day of the relevant period. Gross returns reflect performance data prior to management fees borne by the Fund and incentive allocations while net returns reflect performance data after taking into account management fees borne by the Fund and incentive allocations. Specific performance may vary based on, among other things, whether fund investors are invested in one or more special investments.

¹² The returns for the Drawbridge Special Opportunities Funds reflect the performance of each fund excluding the performance of the redeeming capital accounts which relate to December 31, 2008 redemptions.

7

Principal Investments

At December 31, 2009, we had $0.7 billion of assets (excluding cash and cash equivalents) in our principal investments segment, compared to $0.7 billion (excluding cash and cash equivalents) at December 31, 2008. During the fourth quarter of 2009, we increased commitments to our principal investments by $1 million and funded $7 million of our commitments. We had $131 million of unfunded commitments to our principal investments as of December 31, 2009.

Our principal investments segment generated a loss of $82 million for 2009, due primarily to reserves for a non-cash impairment of $101 million on certain of our funds’ investments and $24 million of net interest expense, offset by $43 million of earnings on our balance sheet investments.

Our principal investments segment generated a loss of $59 million for the three months ended December 31, 2009, due primarily to reserves for a non-cash impairment of $67 million on certain of our funds’ investments and $4 million of net interest expense, offset by $12 million of earnings on our balance sheet investments.

Segment Expenses

Segment expenses for 2009 were $291 million, down from $319 million for 2008. Segment expenses for 2009 and 2008 include $47 million and $29 million of profit sharing compensation, respectively, which is a function of the performance of various funds.

Segment expenses were $97 million in the fourth quarter of 2009, up from $33 million for the fourth quarter of 2008. Segment expenses for the fourth quarter of 2009 included $26 million of profit sharing compensation, which is a function of revenues received from our various funds.

The Company had $301 million of share-based compensation expense (primarily relating to expense recorded in connection with the principals agreement, the issuance of restricted stock units to Fortress employees, and the issuance of restricted partnership units) for the quarter ended December 31, 2009, which contributed to our reporting a GAAP net loss. Share-based compensation expense is not included in segment expenses or in the calculation of distributable earnings.

Corporate Credit Agreement

During the fourth quarter, we paid down the credit facility by $14 million. As of December 31, 2009, we have $398 million of debt outstanding and have capacity available of approximately $60 million under our revolving credit facility.

Non-GAAP Information

Fortress discloses certain non-GAAP financial information, which management believes provides a meaningful basis for comparison among present and future periods. The following are non-GAAP measures used in the accompanying financial information:

• Pre-tax distributable earnings (DE) and pre-tax distributable earnings per dividend paying share

• Fund management DE

• Segment revenues

• GAAP net income excluding principals agreement compensation

• Weighted Average Dividend Paying Shares and Units Outstanding (Used for DEPS)

8

We urge you to read the reconciliation of such data to the related GAAP measures appearing in the exhibits to this release.

Conference Call

Management will host a conference call today, Thursday, February 25, 2010 at 8:00 A.M. Eastern Time. A copy of the earnings release is posted to the Investor Relations section of Fortress’s website, www.fortress.com.

All interested parties are welcome to participate on the live call. The conference call may be accessed by dialing 1-877-252-8576 (from within the U.S.) or 1-706-679-1521 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “Fortress Fourth Quarter Earnings Call.”

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.fortress.com. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast.

A telephonic replay of the conference call will also be available until 11:59 P.M. Eastern Time on Friday, March 12, 2010 by dialing 1-800-642-1687 (from within the U.S.) or 1-706-645-9291 (from outside of the U.S.); please reference access code “54712067.”

About Fortress

Fortress is a leading global alternative asset manager with approximately $31.8 billion in assets under management as of December 31, 2009. Fortress manages private equity funds, liquid hedge funds and hybrid funds. Fortress was founded in 1998. For more information regarding Fortress Investment Group LLC or to be added to our e-mail distribution list, please visit www.fortress.com.

Cautionary Note Regarding Forward-Looking Statements — Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our sources of management fees, incentive income and investment income (loss), estimated fund performance, the amount and source of expected capital commitments, amount of redemptions and our effective tax rate. These statements are not historical facts, but instead represent only the Company’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company’s control. It is possible that the sources and amounts of management fees, incentive income and investment income, the amount and source of expected capital commitments for any new fund, redemption amounts or our effective tax rate may differ, possibly materially, from these forward-looking statements, and any such differences could cause our actual results to differ materially from the results expressed or implied by these forward-looking statements. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K, which is, or will be, available on the Company’s website (www.fortress.com). In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. The Company can give no assurance that the expectations of any forward-looking statement will be obtained. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

9

Fortress Investment Group LLC

Consolidated Statements of Operations

(dollars in thousands, except share data)

	Year Ended December 31,
	2009			2008			2007
Revenues
Management fees from affiliates	$	433,501		$	593,007		$	414,166
Incentive income from affiliates		50,900			56,588			442,892
Expense reimbursements from affiliates		85,186			52,627			48,191
Other revenues		14,508			29,578			21,736
Interest and dividend income - investment company holdings		—			—			309,030
		584,095			731,800			1,236,015
Expenses
Interest expense
Investment company holdings		—			—			132,620
Fortress debt		24,271			40,140			34,313
Compensation and benefits		504,645			440,659			658,815
Principals agreement compensation		952,077			954,685			852,956
General, administrative and other		92,059			84,875			99,885
Depreciation and amortization		10,784			9,994			8,454
		1,583,836			1,530,353			1,787,043
Other Income (Loss)
Gains (losses) from investments
Investment company holdings		—			—			(647,477	)
Direct investments
Net realized gains (losses)		(2,522	)		(1,770	)		(2,037	)
Net realized gains (losses) from affiliate investments		98			(689	)		145,449
Net unrealized gains (losses)		—			—			1,316
Net unrealized gains (losses) from affiliate investments		27,797			(55,846	)		(253,888	)
Tax receivable agreement liability reduction		(55	)		55,115			—
Earnings (losses) from equity method investees		60,281			(304,180	)		(61,674	)
		85,599			(307,370	)		(818,311	)
Income (Loss) Before Deferred Incentive Income and Income Taxes		(914,142	)		(1,105,923	)		(1,369,339	)
Deferred incentive income		—			—			307,034
Income (Loss) Before Income Taxes		(914,142	)		(1,105,923	)		(1,062,305	)
Income tax benefit (expense)		5,000			(115,163	)		5,632
Net Income (Loss)	$	(909,142	)	$	(1,221,086	)	$	(1,056,673	)
Principals’ and Others’ Interests in Income (Loss) of Consolidated Subsidiaries	$	(654,527	)	$	(898,798	)	$	(996,870	)
Net Income (Loss) Attributable to Class A Shareholders	$	(254,615	)	$	(322,288	)	$	(59,803	)
Dividends Declared Per Class A Share	$	—		$	0.4500		$	0.8424
Earnings Per Unit - Fortress Operating Group							Jan 1 through Jan 16
Net income per Fortress Operating Group unit							$	0.36
Weighted average number of Fortress Operating Group units outstanding								367,143,000
Earnings (Loss) Per Class A Share - Fortress Investment Group							Jan 17 through Dec 31
Net income (loss) per Class A share, basic	$	(2.08	)	$	(3.50	)	$	(2.14	)
Net income (loss) per Class A share, diluted	$	(2.08	)	$	(3.50	)	$	(2.14	)
Weighted average number of Class A shares outstanding, basic		125,740,897			94,934,487			92,214,827
Weighted average number of Class A shares outstanding, diluted		125,740,897			94,934,487			92,214,827

10

Fortress Investment Group LLC

Consolidated Balance Sheets

(dollars in thousands, except share data)

	December 31,
	2009			2008
Assets
Cash and cash equivalents	$	197,099		$	263,337
Due from affiliates		64,511			38,504
Investments
Equity method investees		866,467			774,382
Options in affiliates		748			39
Deferred tax asset		440,639			408,066
Other assets		90,803			93,407
	$	1,660,267		$	1,577,735
Liabilities and Equity
Liabilities
Accrued compensation and benefits	$	131,134		$	158,033
Due to affiliates		345,976			346,265
Deferred incentive income		160,097			163,635
Debt obligations payable		397,825			729,041
Other liabilities		25,921			26,741
		1,060,953			1,423,715
Commitments and Contingencies
Equity
Class A shares, no par value, 1,000,000,000 shares authorized, 145,701,622 and 94,609,525 shares issued and outstanding at December 31, 2009 and 2008, respectively		—			—
Class B shares, no par value, 750,000,000 shares authorized, 307,773,852 and 312,071,550 shares issued and outstanding at December 31, 2009 and 2008, respectively		—			—
Paid-in capital		1,029,536			596,803
Retained earnings (accumulated deficit)		(767,994	)		(513,379	)
Accumulated other comprehensive income (loss)		(325	)		(866	)
Total Fortress shareholders’ equity		261,217			82,558
Principals’ and others’ interests in equity of consolidated subsidiaries		338,097			71,462
Total Equity		599,314			154,020
	$	1,660,267		$	1,577,735

11

Fortress Investment Group LLC

Exhibit 1

Assets Under Management and Fund Management DE

(dollars in millions)

	Three Months Ended												Full Year 2008			Three Months Ended												Full Year 2009
	March 31, 2008			June 30, 2008			September 30, 2008			December 31, 2008						March 31, 2008			June 30, 2009			September 30, 2009			December 31, 2009
Fortress
Assets Under Management
Private Equity & Castles	$	15,885		$	16,137		$	14,923		$	13,489		$	13,489		$	13,239		$	13,795		$	14,336		$	14,576		$	14,576
Liquid Hedge Funds		9,254			9,705			9,104			7,169			7,169			4,809			4,571			4,483			4,297			4,297
Hybrid Hedge Funds		8,149			8,266			8,221			6,494			6,494			6,451			9,918			9,830			9,542			9,542
Hybrid Private Equity Funds		741			858			2,041			2,302			2,302			2,039			2,757			3,351			3,347			3,347
AUM - Ending Balance	$	34,029		$	34,966		$	34,289		$	29,454		$	29,454		$	26,538		$	31,041		$	32,000		$	31,762		$	31,762
Third-Party Capital Raised	$	2,822		$	2,839		$	2,581		$	420		$	8,662		$	9		$	233		$	460		$	677		$	1,379
Segment Revenues
Management fees	$	145		$	150		$	156		$	147		$	598		$	106		$	110		$	108		$	100		$	424
Incentive income		32			15			(3	)		(107	)		(63	)		1			7			10			57			75
Total		177			165			153			40			535			107			117			118			157			499
Segment Expenses
Operating expenses		(74	)		(70	)		(81	)		(64	)		(289	)		(59	)		(56	)		(58	)		(70	)		(243	)
Profit sharing compensation expenses		(32	)		(20	)		(9	)		32			(29	)		(4	)		(8	)		(9	)		(26	)		(47	)
Unallocated Expenses		—			—			—			(1	)		(1	)		—			—			—			(1	)		(1	)
Total		(106	)		(90	)		(90	)		(33	)		(319	)		(63	)		(64	)		(67	)		(97	)		(291	)
Fund Management DE	$	71		$	75		$	63		$	7		$	216		$	44		$	53		$	51		$	60		$	208

12

Fortress Investment Group LLC

Exhibit 1

Assets Under Management and Fund Management DE

(dollars in millions)

	Three Months Ended												Full Year 2008			Three Months Ended												Full Year 2009
	March 31, 2008			June 30, 2008			September 30, 2008			December 31, 2008						March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009
Private Equity Funds & Castles
Assets Under Management
Private Equity Funds	$	12,382		$	12,639		$	11,696		$	10,307		$	10,307		$	10,161		$	10,602		$	11,057		$	11,344		$	11,344
Castles		3,503			3,498			3,227			3,182			3,182			3,078			3,193			3,279			3,232			3,232
AUM - Ending Balance	$	15,885		$	16,137		$	14,923		$	13,489		$	13,489		$	13,239		$	13,795		$	14,336		$	14,576		$	14,576
Third-Party Capital Raised	$	—		$	745		$	500		$	—		$	1,245		$	—		$	—		$	—		$	—		$	—
Segment Revenues
Management fees	$	53		$	55		$	53		$	56		$	217		$	49		$	52		$	45		$	35		$	181
Incentive income		29			—			(16	)		(107	)		(94	)		—			—			—			36			36
Total		82			55			37			(51	)		123			49			52			45			71			217
Segment Expenses
Operating expenses		(15	)		(17	)		(19	)		(14	)		(65	)		(16	)		(17	)		(15	)		(19	)		(67	)
Profit sharing compensation expenses		(13	)		(2	)		3			34			22			—			—			—			(13	)		(13	)
Total		(28	)		(19	)		(16	)		20			(43	)		(16	)		(17	)		(15	)		(32	)		(80	)
Fund Management DE	$	54		$	36		$	21		$	(31	)	$	80		$	33		$	35		$	30		$	39		$	137

13

Fortress Investment Group LLC

Exhibit 1

Assets Under Management and Fund Management DE

(dollars in millions)

	Three Months Ended												Full Year 2008			Three Months Ended												Full Year 2009
	March 31, 2008			June 30, 2008			September 30, 2008			December 31, 2008						March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009
Liquid Hedge Funds
Assets Under Management
Fortress Macro Funds 13	$	—		$	—		$	—		$	—		$	—		$	—		$	1,174		$	1,544		$	1,986		$	1,986
Drawbridge Global Macro Funds 14		8,597			8,797			8,045			6,101			6,101			3,781			2,484			2,074			1,429			1,429
Fortress Commodities Funds 15		657			908			1,059			1,068			1,068			1,028			913			865			882			882
AUM - Ending Balance 16	$	9,254		$	9,705		$	9,104		$	7,169		$	7,169		$	4,809		$	4,571		$	4,483		$	4,297		$	4,297
Third-Party Capital Raised	$	1,286		$	925		$	600		$	16		$	2,827		$	9		$	99		$	187		$	409		$	704
Segment Revenues
Management fees	$	53		$	57		$	60		$	48		$	218		$	23		$	20		$	18		$	19		$	80
Incentive income		3			14			—			—			17			—			—			9			5			14
Total		56			71			60			48			235			23			20			27			24			94
Segment Expenses
Operating expenses		(24	)		(25	)		(29	)		(19	)		(97	)		(14	)		(11	)		(14	)		(18	)		(57	)
Profit sharing compensation expenses		(17	)		(16	)		(5	)		(4	)		(42	)		(3	)		(2	)		(7	)		(4	)		(16	)
Total		(41	)		(41	)		(34	)		(23	)		(139	)		(17	)		(13	)		(21	)		(22	)		(73	)
Fund Management DE	$	15		$	30		$	26		$	25		$	96		$	6		$	7		$	6		$	2		$	21
Returns
Gross Returns 17
Fortress Macro Offshore Fund L.P. 18		N/A			N/A			N/A			N/A			N/A			N/A			4.3	%		4.9	%		3.9	%		13.7	%
Drawbridge Global Macro Fund Ltd		0.3	%		-2.1	%		-10.6	%		-9.1	%		-20.3	%		5.7	%		6.2	%		7.9	%		4.4	%		26.5	%
Fortress Commodities Fund L.P.		1.5	%		10.6	%		-1.1	%		0.1	%		11.2	%		0.0	%		2.3	%		5.2	%		3.2	%		11.0	%
Net Returns 17
Fortress Macro Offshore Fund L.P. 18		N/A			N/A			N/A			N/A			N/A			N/A			3.2	%		3.6	%		2.7	%		9.8	%
Drawbridge Global Macro Fund Ltd		-0.2	%		-2.5	%		-11.1	%		-9.6	%		-21.9	%		5.2	%		5.8	%		7.4	%		3.9	%		24.2	%
Fortress Commodities Fund L.P.		0.8	%		8.1	%		-1.6	%		-0.4	%		6.8	%		-0.5	%		1.8	%		3.9	%		2.0	%		7.3	%

¹³ Combined AUM for Fortress Macro Onshore Fund LP, Fortress Macro Offshore Fund L.P., Fortress Macro Fund Ltd and Fortress Macro managed accounts.

¹⁴ Combined AUM for Drawbridge Global Macro Fund L.P., Drawbridge Global Macro Intermediate Fund L.P., Drawbridge Global Macro Alpha Intermediate Fund L.P., DBGM Offshore Ltd, DBGM Onshore LP, DBGM Alpha V Ltd and Drawbridge Global Macro managed accounts.

¹⁵ Combined AUM for Fortress Commodities Fund L.P. and Commodities managed accounts.

¹⁶ Subsequent to year end, the liquid hedge funds had redemption payouts of approximately $0.7 billion in January 2010. Approximately $0.5 billion of this amount consisted of distributions from the Macro Funds’ SPVs.

¹⁷ The performance data contained herein reflects returns for a “new issue eligible,” single investor class as of the close of business on the last day of the relevant period. Gross returns reflect performance data prior to management fees borne by the Fund and incentive allocations while net returns reflect performance data after taking into account management fees borne by the Fund and incentive allocations.

¹⁸ The date of inception of the Fund was May 1, 2009.

14

Fortress Investment Group LLC

Exhibit 1

Assets Under Management and Fund Management DE

(dollars in millions)

	Three Months Ended												Full Year 2008			Three Months Ended												Full Year 2009
	March 31, 2008			June 30, 2008			September 30, 2008			December 31, 2008						March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009
Hybrid Hedge Funds
Assets Under Management
Drawbridge Special Opportunities Funds 19	$	6,418		$	6,475		$	6,391		$	4,964		$	4,964		$	4,915		$	5,097		$	5,296		$	5,209		$	5,209
Fortress Partners Funds 20		1,731			1,791			1,830			1,530			1,530			1,536			1,681			1,783			1,870			1,870
Value Recovery Funds 21		—			—			—			—			—			—			3,140			2,751			2,463			2,463
AUM - Ending Balance 22	$	8,149		$	8,266		$	8,221		$	6,494		$	6,494		$	6,451		$	9,918		$	9,830		$	9,542		$	9,542
Third-Party Capital Raised	$	757		$	104		$	536		$	12		$	1,409		$	—		$	—		$	—		$	—		$	—
Segment Revenues
Management fees	$	37		$	36		$	39		$	36		$	148		$	28		$	30		$	32		$	33		$	123
Incentive income		—			1			13			—			14			1			—			—			1			2
Total		37			37			52			36			162			29			30			32			34			125
Segment Expenses
Operating expenses		(33	)		(26	)		(30	)		(26	)		(115	)		(25	)		(21	)		(24	)		(27	)		(97	)
Profit sharing compensation expenses		(2	)		(2	)		(7	)		2			(9	)		(1	)		(2	)		(2	)		(1	)		(6	)
Total		(35	)		(28	)		(37	)		(24	)		(124	)		(26	)		(23	)		(26	)		(28	)		(103	)
Fund Management DE	$	2		$	9		$	15		$	12		$	38		$	3		$	7		$	6		$	6		$	22
Returns
Gross Returns 23
Drawbridge Special Opportunities LP 24		-1.1	%		1.4	%		-4.6	%		-21.5	%		-24.9	%		3.6	%		7.8	%		7.4	%		6.3	%		27.5	%
Drawbridge Special Opportunities LTD 24		-1.1	%		0.2	%		-4.6	%		-23.5	%		-27.7	%		4.0	%		6.5	%		10.8	%		7.9	%		32.6	%
Fortress Partners Funds LP		-4.3	%		0.8	%		-12.5	%		-19.7	%		-32.2	%		-1.7	%		8.8	%		5.0	%		5.1	%		18.0	%
Fortress Partners Funds LTD		-3.7	%		1.9	%		-10.0	%		-14.4	%		-24.3	%		-1.1	%		9.5	%		4.7	%		6.0	%		20.2	%
Net Returns 23
Drawbridge Special Opportunities LP 24		-1.6	%		0.9	%		-5.1	%		-22.0	%		-26.4	%		3.1	%		7.3	%		6.8	%		5.8	%		25.0	%
Drawbridge Special Opportunities LTD 24		-1.9	%		-0.3	%		-5.1	%		-23.9	%		-29.4	%		3.5	%		6.0	%		10.3	%		7.4	%		30.0	%
Fortress Partners Funds LP		-4.6	%		0.5	%		-12.9	%		-19.8	%		-33.0	%		-2.0	%		8.5	%		4.7	%		4.8	%		16.7	%
Fortress Partners Funds LTD		-4.0	%		1.6	%		-10.3	%		-14.6	%		-25.3	%		-1.4	%		9.2	%		4.4	%		5.7	%		18.9	%

¹⁹ Combined AUM for Drawbridge Special Opportunities Fund Ltd, Drawbridge Special Opportunities Fund LP and Drawbridge Special Opportunities Fund managed accounts.

²⁰ Combined AUM for Fortress Partners Offshore Fund LP and Fortress Partners Fund LP.

²¹ Fortress will receive management fees from these funds equal to 1% of cash receipts and up to 1% per annum on certain managed assets, subject to collectability, and may receive limited incentive income if aggregate realizations exceed an agreed threshold.

²² The hybrid hedge funds, which have an annual notice date for redemptions, have received redemption notices effective December 31, 2009 of approximately $1.5 billion, using December 31, 2009 values. This amount is subject to change based on performance. For primarily all of these funds, redemptions will be paid out over time as the underlying investments are liquidated, in accordance with the governing documents of the applicable funds.

²³ The performance data contained herein reflects returns for a “new issue eligible,” single investor class as of the close of business on the last day of the relevant period. Gross returns reflect performance data prior to management fees borne by the Fund and incentive allocations while net returns reflect performance data after taking into account management fees borne by the Fund and incentive allocations. Specific performance may vary based on, among other things, whether fund investors are invested in one or more special investments.

²⁴ The returns for the Drawbridge Special Opportunities Funds reflect the performance of each fund excluding the performance of the redeeming capital accounts which relate to December 31, 2008 redemptions.

15

Fortress Investment Group LLC

Exhibit 1

Assets Under Management and Fund Management DE

(dollars in millions)

	Three Months Ended												Full Year 2008			Three Months Ended												Full Year 2009
	March 31, 2008			June 30, 2008			September 30, 2008			December 31, 2008						March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009
Hybrid Private Equity Funds
Assets Under Management
Long Dated Value Funds	$	517		$	519		$	552		$	532		$	532		$	537		$	537		$	569		$	623		$	623
Real Assets Funds		91			107			230			212			212			207			207			178			164			164
Fortress Credit Opportunities Funds		133			232			1,259			1,558			1,558			1,295			1,876			2,224			2,074			2,074
Japan Opportunities Funds		—			—			—			—			—			—			137			380			486			486
AUM - Ending Balance	$	741		$	858		$	2,041		$	2,302		$	2,302		$	2,039		$	2,757		$	3,351		$	3,347		$	3,347
Third-Party Capital Raised	$	779		$	1,065		$	945		$	392		$	3,181		$	—		$	134		$	273		$	268		$	675
Segment Revenues
Management fees	$	2		$	2		$	4		$	7		$	15		$	6		$	8		$	13		$	13		$	40
Incentive income		—			—			—			—			—			—			7			1			15			23
Total		2			2			4			7			15			6			15			14			28			63
Segment Expenses
Operating expenses		(2	)		(2	)		(3	)		(5	)		(12	)		(4	)		(7	)		(5	)		(6	)		(22	)
Profit sharing compensation expenses		—			—			—			—			—			—			(4	)		—			(8	)		(12	)
Total		(2	)		(2	)		(3	)		(5	)		(12	)		(4	)		(11	)		(5	)		(14	)		(34	)
Fund Management DE	$	—		$	—		$	1		$	2		$	3		$	2		$	4		$	9		$	14		$	29

16

Fortress Investment Group LLC

Exhibit 2

Reconciliation of Fund Management DE to Pre-tax Distributable Earnings and GAAP Net income (Loss) and

Reconciliation of Segment Revenues to GAAP Revenues

(dollars in millions)

	Three Months Ended												Full Year 2008			Three Months Ended												Full Year 2009
	March 31, 2008			June 30, 2008			September 30, 2008			December 31, 2008						March 31, 2009			June 30, 2009			September 30, 2009			December 31, 2009
Fund Management DE	$	71		$	75		$	63		$	7		$	216		$	44		$	53		$	51		$	60		$	208
Investment Income (Loss)		(3	)		(7	)		(73	)		(255	)		(338	)		(27	)		14			10			(55	)		(58	)
Interest Expense		(10	)		(10	)		(10	)		(10	)		(40	)		(8	)		(8	)		(4	)		(4	)		(24	)
Pre-tax Distributable Earnings	$	58		$	58		$	(20	)	$	(258	)	$	(162	)	$	9		$	59		$	57		$	1		$	126
Private Equity incentive income		6			3			1			—			10			—			—			—			3			3
Hedge Fund incentive income		—			—			—			—			—			—			—			(2	)		2			—
Reserve for clawback		—			—			16			107			123			—			—			—			(27	)		(27	)
Distributions of earnings from equity method investees		—			—			—			—			—			—			—			—			(1	)		(1	)
Earnings (losses) from equity method investees		(42	)		(26	)		(13	)		(155	)		(236	)		(39	)		37			29			(7	)		20
Gains (losses) on options		(12	)		(3	)		(1	)		—			(16	)		—			—			1			—			1
Gains (losses) on other Investments		(18	)		(4	)		(6	)		(9	)		(37	)		(2	)		20			19			(13	)		24
Incentive income guarantee recorded as a loss		—			—			—			(3	)		(3	)		—			—			—			3			3
Impairment of investments		—			10			50			227			287			32			—			2			67			101
Employee equity-based compensation		(36	)		(53	)		(57	)		(12	)		(158	)		(53	)		(53	)		(61	)		(61	)		(228	)
Principal compensation		(237	)		(238	)		(240	)		(240	)		(955	)		(235	)		(237	)		(240	)		(240	)		(952	)
Employee portion of incentive income		10			—			—			(15	)		(5	)		—			—			—			10			10
Principals’ and Others’ Interests in Income (Losses) of Consolidated Subsidiaries		209			195			208			279			891			220			128			133			179			660
Tax receivable agreement liability reduction		—			—			—			55			55			—			—			—			—			—
Taxes		(7	)		2			5			(116	)		(116	)		1			1			3			—			5
GAAP Net Income (Loss) Attributable to Class A Shareholders	$	(69	)	$	(56	)	$	(57	)	$	(140	)	$	(322	)	$	(67	)	$	(45	)	$	(59	)	$	(84	)	$	(255	)
Principals’ and Others’ Interests in Income (Losses) of Consolidated Subsidiaries		(209	)		(194	)		(210	)		(286	)		(899	)		(220	)		(126	)		(131	)		(177	)		(654	)
GAAP Net Income (Loss)	$	(278	)	$	(250	)	$	(267	)	$	(426	)	$	(1,221	)	$	(287	)	$	(171	)	$	(190	)	$	(261	)	$	(909	)
Segment Revenues	$	177		$	165		$	153		$	40		$	535		$	107		$	117		$	118		$	157		$	499
Adjust management fees		(1	)		—			(2	)		(2	)		(5	)		(1	)		(1	)		(1	)		13			10
Adjust incentive income		5			3			4			108			120			(1	)		—			(2	)		(22	)		(25	)
Other revenues		20			20			30			12			82			17			23			29			31			100
GAAP Revenues	$	201		$	188		$	185		$	158		$	732		$	122		$	139		$	144		$	179		$	584

“Distributable earnings” is our supplemental measure of operating performance. It reflects the value created which management considers available for distribution during any period. As compared to generally accepted accounting principles (“GAAP”) net income, distributable earnings excludes the effects of unrealized gains (or losses) on illiquid investments, reflects contingent revenue which has been received as income to the extent it is not expected to be reversed, and disregards expenses which do not require an outlay of assets, whether currently or on an accrued basis. Distributable earnings is reflected on an unconsolidated and pre-tax basis, and, therefore, the interests in consolidated subsidiaries related to Fortress Operating Group units (held by the principals) and income tax expense are added back in its calculation. Distributable earnings is not a measure of cash generated by operations which is available for distribution nor should it be considered in isolation or as an alternative to cash flow or net income and it is not necessarily indicative of liquidity or cash available to fund our operations. For a complete discussion of distributable earnings and its reconciliation to GAAP, as well as an explanation of the calculation of distributable earnings impairment, see note 10 to our financial statements included in our Annual Report on Form 10-K for the quarter ended December 31, 2009.

17

Our management uses distributable earnings:

• in its determination of periodic distributions to equity holders;

• in making operating decisions and assessing the performance of each of our core businesses;

• for planning purposes, including the preparation of our annual operating budgets; and

• as a valuation measure in strategic analyses in connection with the performance of our funds and the performance of our employees.

Growing distributable earnings is a key component to our business strategy and distributable earnings is the supplemental measure used by our management to evaluate the economic profitability of each of our businesses and our total operations. Therefore, we believe that it provides useful information to our investors in evaluating our operating performance. Our definition of distributable earnings is not based on any definition contained in our amended and restated operating agreement.

18

Fortress Investment Group LLC

Exhibit 3

Reconciliation of GAAP Net Income (Loss) Excluding Principals Agreement

Compensation to GAAP Net Income (Loss)

(dollars in thousands)

	Three Months Ended December 31, 2009			Three Months Ended December 31, 2008
GAAP net loss	$	(260,825	)	$	(426,481	)
Principals agreement compensation		239,976			239,975
GAAP net income (loss) excluding principals agreement compensation	$	(20,849	)	$	(186,506	)
	Year Ended December 31, 2009			Year Ended December 31, 2008
GAAP net loss	$	(909,142	)	$	(1,221,086	)
Principals agreement compensation		952,077			954,685
GAAP net income (loss) excluding principals agreement compensation	$	42,935		$	(266,401	)

19

Fortress Investment Group LLC

Exhibit 4

Reconciliation of Weighted Average Class A Shares Outstanding (Used for Basic EPS) to Weighted Average Dividend Paying

Shares and Units Outstanding (Used for DEPS)

	Three Months Ended December 31,
	2009		2008
Weighted Average Class A Shares Outstanding (Used for Basic EPS)	146,733,426		94,990,541
Weighted average fully vested restricted Class A share units with dividend equivalent rights	(1,245,658	)	(445,880	)
Weighted average fully vested restricted Class A shares	(99,520	)	(44,310	)
Weighted Average Class A Shares Outstanding	145,388,248		94,500,351
Weighted average restricted Class A shares 25	216,367		108,661
Weighted average fully vested restricted Class A share units which are entitled to dividend equivalent payments	1,245,658		394,286
Weighted average nonvested restricted Class A share units which are entitled to dividend equivalent payments	25,218,073		24,101,891
Weighted average Fortress Operating Group units	307,773,852		312,071,550
Weighted average Fortress Operating Group RPUs	31,000,000		31,000,000
Weighted Average Dividend Paying Shares and Units Outstanding (Used for DEPS)	510,842,198		462,176,739
	Year Ended December 31,
	2009		2008
Weighted Average Class A Shares Outstanding (Used for Basic EPS)	125,740,897		94,934,487
Weighted average fully vested restricted Class A share units with dividend equivalent rights	(1,185,375	)	(407,255	)
Weighted average fully vested restricted Class A shares	(94,561	)	(26,881	)
Weighted Average Class A Shares Outstanding	124,460,961		94,500,351
Weighted average restricted Class A shares 25	158,500		104,860
Weighted average fully vested restricted Class A share units which are entitled to dividend equivalent payments	1,185,375		407,255
Weighted average nonvested restricted Class A share units which are entitled to dividend equivalent payments	24,153,521		23,815,846
Weighted average Fortress Operating Group units	310,576,187		312,071,550
Weighted average Fortress Operating Group RPUs	31,000,000		21,852,459
Weighted Average Dividend Paying Shares and Units Outstanding (Used for DEPS)	491,534,544		452,752,321

²⁵ Includes both fully vested and nonvested weighted average restricted Class A shares.

20

EX-99.2

Exhibit 99.2

Fortress Investment Group, LLC

Moderator: Lilly Donohue

02-25-10/8:00 a.m. EST

Confirmation # 54712067

Page 1

Fortress Investment Group, LLC

Moderator: Lilly Donohue

February 25, 2010

8:00 a.m. EST

Operator:	Good morning. My name is (Brooke) and I will be your conference operator today. At this time I would like to welcome everyone to the Fortress Fourth Quarter Year End Earnings Conference Call.
	All lines have been placed on mute to prevent any background noise. After the speaker’s remarks there will be a question and answer session. If you would like to ask a question during this time simply press star then the number one on your telephone keypad.
	If you would like to withdraw your question press the pound key. Miss Lilly Donohue you may begin your conference.
Lilly Donohue:	Thanks, (Brooke). Good morning everyone. I’d like to welcome you all this morning, February 25 for our fourth quarter and year-end 2009 earnings conference call. Joining me today is Dan Mudd, our CEO, Dan Bass our CFO.
	We also have with us today Wes Edens, Pete Briger and Mike Novogratz. I would like to point out today that statements today which are not historical facts may be forward-looking statements. Our actual results may differ materially from the estimates or expectations in any forward-looking statements.
	These statements represent the company’s beliefs regarding events that by their nature are uncertain and outside of the company’s control. I would encourage you to review the forward-looking statement disclaimer in our quarterly earnings release including the recommendation to review the risk factors that are contained in our quarterly reports that are filed with the SEC.

Fortress Investment Group, LLC

Moderator: Lilly Donohue

02-25-10/8:00 a.m. EST

Confirmation # 54712067

Page 2

	Now with that I’d like to turn it over to Dan Mudd. Dan?
Dan Mudd:	Thanks Lilly and good morning everybody and thanks for joining us. Let me give you my views on the quarter and the year. I think the year ‘09 at Fortress was really a reflection of the global economy in the markets we invest in. There was progress, there was positive momentum and there were a few bumps along the way.
	Let’s start with the three key indicators that we focus on, assets, distributable earnings and performance. AUM is at $31.8 billion at year-end which is up eight percent. Pre-tax DE was 126 million for the full year versus a loss of $162 in 2008. Q4 DE was one million, a result of $67 million in non-cash items which had already been marked down on the balance sheet that we took through earnings.
	Even so that fourth quarter reversed a loss from a year ago. And importantly fund performance continued to improve across all of our businesses. The macro and credit funds recovered from negative returns in ‘08 ending ‘09 with strong positive returns including reaching some high water marks.
	As of yearend $1.3 billion of assets in the liquid hedge funds were at their respective high water marks and thus eligible to earn performance fees. I’ll spend a few minutes providing some detail and some perspective then Dan Bass will go through the results in detail. We’ll spend the bulk of the time on your questions. First the market in the fourth quarter the markets played out 2009 which was a recovery slow, shallow, bumps along the way if you think about Dubai, Greece and beyond.
	We’re thinking about the arc of this market in three phases. The first phase really transpired in 2008 and 2009. As you all know the system basically ceased to function. Panic set in places, stop gaps were rushed into place. We witnessed that through the dislocation of our private equity business and our macro fund.

Fortress Investment Group, LLC

Moderator: Lilly Donohue

02-25-10/8:00 a.m. EST

Confirmation # 54712067

Page 3

Although we found some opportunities to bottom fish distressed securities in our hybrid business. In response to all that we cut costs, we rebalanced our portfolios, we addressed our capital structure and helped our investors manage their portfolio issues.

We made adjustments of our own, regained initiative and I think that’s evidenced by the capital raising and acquisition and strong investment performance since mid-year ‘09. The second phase began in late ‘09 and it continues today.

We think the extraordinary government intervention has created broad directionality in terms of Central Bank policies, liquidity, deleveraging. In other words the system is functioning but the timing is still uncertain and highly subject to volatility.

In phase II the world is going to change. Over 1,000 banks could fail. Companies will sell or liquidate entire lines of business and deleveraging and restructuring will proliferate. Having made the adjustments at Fortress we think this environment sets up well for our macro business which can benefit from the volatility, in our distressed credit business which is all about restructuring and managing complexity.

Finally we think we’ll enter a third phase over the course of the next couple of years. For some it will be a new normal. But we think that companies will not actually be able to participate in the new normal economy until they have come through the necessary deleveraging, restructuring, consolidation or other painful adjustments.

And that we think, of course, is the classic environment for controlled private equity. So in short I think having survived the turmoil of the past two years we have three and soon to be four businesses that position us well to invest across the cycles.

The company – now let’s go through the company and review the three levers that build value, performance, capital formation and business development. On the performance side assets under management, as you know, refers to the amount on which we earn management fees was $31.8 billion up eight percent on the year.

Fortress Investment Group, LLC

Moderator: Lilly Donohue

02-25-10/8:00 a.m. EST

Confirmation # 54712067

Page 4

That number was essentially flat to Q3 as capital inflows and positive performance offset capital distributions actually paid out and redemptions actually paid out in the quarter. Our fund management business produced solid results of $60 million in distributable earnings for the quarter, $208 million for year which I think is a reiteration of our stable, long-term fee income stream.

Pre-tax DE was $126 million for the full year up significantly from a loss of $162 million in ‘08. In the fourth quarter of ‘09, as I said, pre-tax DE was a million up from a loss of $258 million Q4 ‘08.

As we noted our pre-tax DE results this quarter were impacted by $67 million of non-cash impairments on the balance sheet, $63 million of total impairment is on our investment in Flagler, our Florida based real estate company. This investment has been marked below cost for a period of time and this quarter we took the charge for the unrealized loss through the P&L.

A few words about each of the three businesses, we have a total of $4.3 billion of capital in our liquid hedge funds. The drawbridge global macro fund was up 24.2 percent on an annualized basis for ‘09. In the month of January the fund was up approximately two percent net though February so far has been a bit bumpier.

Here’s a march through time to kind of make clear where we are with respect to high water marks in that business. Entering 2009 all of the capital in our macro funds was under the high water mark. By year-end ‘09 19 percent was above the high water mark and currently we estimate that to have increased to 36 percent.

Thus in total we estimate that over 90 percent of the funds in macro are within three percent of the high water mark or better.

Fortress Investment Group, LLC

Moderator: Lilly Donohue

02-25-10/8:00 a.m. EST

Confirmation # 54712067

Page 5

Moving on to our credit funds we ended the quarter with 12.9 billion of assets under management up significantly from 8.8 billion at the beginning of the year.

That increase was primarily driven by new assets under management and improved performance. Our $5.2 billion credit focused hedge fund Drawbridge Special Opportunities also had a good quarter and was up 5.8 percent net.

This brings the 2009 net return for the fund to 25 percent from a loss of 26 percent in 2008. On average this fund is now within eight percent plus or minus of its high water mark. And Pete’s private equity funds, Pete’s credit private equity funds which total $3.3 billion of assets have a multiple of about 1.3 times invested capital as of yearend.

Now on to the private equity business, Wes’s business saw continued progress in the quarter. Our AUM was at $14.6 billion up from $14.3 in Q3 and up $1.1 billion from the start of ‘09 as valuations improved pretty much across the board.

Clearly we have a ways to go in terms of generating the returns we expect and are used to in private equity. Importantly though we note that the underlying performance of our portfolio companies has been flat to positive. In the aggregate, for example, the cash flow in our private equity portfolios in aggregate was up about 12 percent in ‘09.

And that year we extinguished approximately $3.7 billion of debt in the portfolio companies and refinanced approximately $4.2 billion. So today over 72 percent of the portfolio company’s debt is extended out to 2013 or beyond.

Let me move on and talk about capital formation for just a second.

We’re building a lot of momentum here behind new capital. We raised just under $700 million of new capital in the fourth quarter which brings our total new capital for 2009 to approximately $1.4 billion.

Fortress Investment Group, LLC

Moderator: Lilly Donohue

02-25-10/8:00 a.m. EST

Confirmation # 54712067

Page 6

As a sign of that momentum in the first two months of this year alone we’re raised approximately $651 million, have rolled out a new fund and a number of single investor managed accounts. So as I’ve noted along the way I think we’re seeing investors put capital back to work and we’re working pretty hard to be the solution provider of choice to those clients and investors.

With respect to business development on February 16 we announced the signing of an agreement to acquire Logan Circle which will expand Fortress’s capabilities into traditional asset management. We’ll – as a little perspective we will remain at our core an alternative asset manager and the bulk of our earnings will come from our three original businesses for the foreseeable future.

That said a broader array of businesses will diversify our income streams, increase our client conversations and put us in a position to keep pace with long-term investor flows. A little bit of background on Logan’s Circle partners. This is a $12 billion long only institutional fixed income manager. Logan’s founder Jude Driscoll and his team are well respected in the industry and as important are a very cohesive group who have operated together through this market cycle.

Their fundamental credit focused approach to fixed income is very consistent with our investment philosophy and fills a hole in the credit spectrum where we don’t currently invest.

There’s a debate as you know in the asset management industry, will investors become more conservative, will they seek more liquidity, will they be more focused on catching up returns?

And I think the real answer is it depends upon the individual investor so it makes sense for us to be positioned to serve investors needs whichever way they go. So with that Logan is a building block investment. It will be funded with cash. It will be non-dilutive.

It represents a high quality platform that will enable us to take advantage of big trends in the asset management industry.

Fortress Investment Group, LLC

Moderator: Lilly Donohue

02-25-10/8:00 a.m. EST

Confirmation # 54712067

Page 7

	The team came out of Delaware Asset Management, which oversaw about $170 billion in assets, so this team can manage scale and will be very helpful to us in looking at opportunities as we go forward.
	And we expect to close that transaction during the second quarter. So to summarize I think in 09 we continue to build positive momentum, performance improved across all of our businesses.
	We raised new capital, and looking ahead the business is well positioned, the deal flow is good and we have this new platform to expand into long only asset management. So let me stop there and turn it over to Dan Bass for a deeper dive into the financials. Dan.
Dan Bass:	Thanks, Dan. Good morning everybody. Our financial results and performance for the quarter were solid. This is highlighted by a few specific items, first the stickiness of our AUM, which ended the year at approximately $31.8 billion.
	Seventy nine percent of these assets represent long-term committed capital which provides us with a stable source of management fees and a platform from which we earn incentive fees.
	Second performance was strong across the board and we’re beginning to tap into the incentive fee earning potentials of our funds, demonstrated by the incentive income we recognized in the quarter.
	And finally we are continuing to diversify the products that we offer our investors through new alternative funds we are raising such as our Japan and credit opportunities funds, liquid funds, and through acquisitions such as Logan’s Circle.
	With those points in mind let me review our results in more detail. Pretax DE, one of our primary measures of financial performance was $1 million for the quarter and $126 million for the year.
	The result, this result is impacted by non-cash impairment charges of $67 million for the quarter and $101 for the year which brings our pretax DE per dividend paying share to 26 cents for the year per share. If I may I will take a moment to address our GAAP net income.

Fortress Investment Group, LLC

Moderator: Lilly Donohue

02-25-10/8:00 a.m. EST

Confirmation # 54712067

Page 8

Our GAAP net loss, attributable Class A shareholders was $255 million for the year, or $2.08 per share. This was an improvement over last year where we had a loss of $3.50 per share.

And also our GAAP net income excluding the $952 million of non-cash charges due to the principles compensation accounting was $43 million for the year. Drilling in on DE results more closely, the largest component of DE is our fee based operating results, or fund management DE.

For the quarter fund management DE was $60 million and $208 million for the year. This result was comprised of $157 million of segment revenues and $97 million of segment expenses, resulting in a DE operating margin for the quarter of 38 percent, but brought our full year operating margin to 42 percent.

Segment management fees were $100 million for the quarter. This was $8 million less than the third quarter as we took an $11 million reserve on deferred management fees previously recorded on our side, Intrawest sidecar fund.

Incentive fees were $57 million for the quarter, an increase of $47 million from the third quarter. Some of our mature private equities funds sold a portion of their holdings in Brookdale in November realizing and distributing proceeds to investors and earning us $9 million in incentive fees.

Related to that we also released $27 million of our incentive fee clawback reserve which we took late last year on our private equities Fund II. This reserve release was also due to the Brookdale as the transaction reduced our clawback exposure to the fund.

The remaining $21 million was primarily due to $15 million of incentive fees from our hybrid PE funds related to required GP distributions based on the funds taxable profits and $6 million from our liquid hedge funds.

Fortress Investment Group, LLC

Moderator: Lilly Donohue

02-25-10/8:00 a.m. EST

Confirmation # 54712067

Page 9

Further influencing fund management DE was the positive performance of our funds. As noted in our press release all performance measures for all of our funds are up during the quarter and for the year.

As Dan mentioned the Special Opportunities Fund was up 5.8 percent for the quarter, 25 percent for the year, and the Drawbridge Global Macro Fund was up 3.9 percent for the quarter, and 24.2 percent for the year.

All of our funds entered 08 carrying losses to reach their respective high water marks. And the performance of all these funds, have allowed them to make up considerable portion of this, these losses.

To reiterate what Dan said, approximately 19 percent of our Macro Funds fee paying capital was at its high water mark as of the year-end. As a result we were able to generate a couple million dollars of incentive income during the fourth quarter based on its return.

Right now assuming the SPV liquidates at current marks, we estimate the macro funds have approximately 36 percent of liquid fee-paying capital above its high water mark.

And approximately another 57 percent bringing the total to approximately 93 percent of the capital is above or within three percent of reaching the high water mark.

The commodities fund which has all its capital above the high water mark, earned $4 million of incentive income in the quarter and $10 million for the year. Moving onto assets, AUM for the quarter was flat compared to the prior quarter ending at $31.8 billion.

Included during the quarter was $1.1 billion of payouts to investors, $700 million pertained to the preplanned orderly liquidation of our macro SPV and our slow pay accounts in our credit hedge funds

Fortress Investment Group, LLC

Moderator: Lilly Donohue

02-25-10/8:00 a.m. EST

Confirmation # 54712067

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and $400 million related to current period redemptions. In addition AUM went down by $200 million due to the positive performance which allowed us to return that capital to investors in our hybrid PE funds.

These capital outflows were offset by $680 million of capital raised in the fourth quarter, you know across all of our funds. Additionally fund performance increased AUM by $500 million, $300 million from private equity and $200 million from our liquid hedge funds.

So far as also Dan mentioned, 2010 capital raising efforts are off to a good start having raised approximately $650 million of new money in the first two months. As I mentioned previously, the majority of our expenses were related to compensation.

Our compensation structures are intended to retain talent but also provide us flexibility to align our expenses and our employee’s incentives with the performance of the firm. Our goal is to retain operating margins that are between 40 and 50 percent based on management fees and incentive income we are generating. While our margin for the fourth quarter was 38 percent due to year-end compensation, we did attain a full year margin of 42 percent which is within our annual targeted range.

Further we issued our first meaningful equity awards since IPO as part of our annual performance bonuses. These awards granted in 2010 have three year vesting periods and further align the long-term relationship between performance and our employee’s compensation.

Shifting to principle finance, the segment that reflects the performance results of our balance sheet investments. The quarterly DE for this segment was a $59 million loss. This loss included 67 million of non-cash impairments of which 63 million related to our investment in Flagler.

After taking this charge, our balance sheet no longer has any investments with unrecognized losses. In fact, we have unrealized gains for DE purposes of approximately $153 million.

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Our principle asset portfolio ended the quarter $847 million. The value during the quarter was down 25 percent or $25 million or 3 percent, $21 million of this decline related to that, to the Flagler investments.

On the other side of the balance sheet we paid down $14 million of our term loan during the quarter and subsequently after year-end we paid down another 14 bringing our total of debt outstanding to approximately $384 million.

In addition pursuant to our credit agreement our debt to EBITDA leverage ratio ended the year at 1.71 times reflecting a healthy low leverage substantial capital structure. Additionally as you may have already seen, yesterday S&P and Fitch issued investment grade ratings for Fortress. Fitch gave us a BBB rating and S&P a BBB minus rating and both with a stable outlook.

These ratings provide us with more flexibility to optimize our capital structure as we have two plus years remaining to maturity on our existing credit facility.

As it relates to taxes, our effective tax rate for 2009 was approximately 27 percent. This was on the higher end of our expected range of 24 to 27 percent as most of the impairments recorded in the fourth quarter and for the year were on assets held in our principle holdings entity of our business.

This entity does not incur any entity level tax and thus no tax benefit could be recorded against this loss. This has the effect of unfortunately increasing our effective tax rate.

In closing, I want to reiterate the highlights I opened with. We believe our 2009 fund management DE results are reflection of the stability of our AUM and platform. Our 2009 performance enabled our funds to recur a significant portion of prior period losses and in some cases, earn incentive fees.

This has positioned us well for 2010 and we expect to earn incentive fees across a greater portion of our funds. And finally, we continue to create funds, raise capital, and build businesses that contribute to our firms earning potential and further diversify our platform.

Thank you for your time and now we will open it up for questions.

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Operator:	At this time, I would like to remind everyone in order to ask a question, please press star then the number one on your telephone keypad. We’ll pause for a moment to compile the Q&A roster.
	Your first question comes from Roger Freeman with Barclays Capital.
Roger Freeman:	Good morning. Hey, Dan Bass the credit rating that you just got issued. Should we look at that as something where you’re going to issue debt near-term to have available to you know either support existing investments or make new ones?
Dan Bass:	You know it’s another spot in the continuum around us optimizing our capital structure. I think it just opens up avenues for opportunities for us to do many different things with respect to our capital structure.
	We just look at it as you know as a validation from the rating agencies. They just use that you know that we’re investment grade and that you know our business is investment grade.
Roger Freeman:	Right. OK, so but just to look at what you’ve got available right now, 100ish right in cash in the balance sheet and 60 of availability on the credit facility. Is that about right?
Dan Bass:	Yes, that’s about – you know probably closer to $150 million on the balance sheet and $60 million of availability on …
Roger Freeman:	OK, so a couple hundred million bucks right now.
Dan Bass:	Yes.
Roger Freeman:	OK. All right and I guess for Dan Mudd can you just maybe talk a little bit more about the you know maybe the long only strategy, longer term. I mean this fixed income platform sounds very good. I guess the question is how do you plan to scale it? How much do you need to scale it?

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	Because I kind of look at the you know the fee you know 20 basis points or less right on the AUM. It looks like it’s kind of a neutral contributor right now and you sort of back out the comp expenses.
Dan Mudd:	Yes, Roger, thanks, it’s a platform that gets us into the business. Our estimation is that the scope and the scale of the infrastructure and the team there could grow. That said, as I said in my remarks you know we’re going to be – you know we’re going to be focused on the businesses that we’re in alternative assets management for some time to come.
	Those will be the big income generators but I think over time you know if you kind of learn anything coming out of ‘08 and ‘09, it’s you know that a diverse array of businesses is a sensible and prudent thing to have for the company overall.
	We were able on account of the market conditions, I think we actually talked again this in our last conference call, there are businesses exactly like this, a good team, a good track record, scalable, but they’re in a corporate situation or a capital structure situation where they’re going to move around and that’s a lot of what drives consolidation in the asset management industry at large.
	We had an opportunity on a very prudent, very conservative cash only basis to do that and to enter this business so we would them to grow prudently along with the market and as time goes by there will be additional opportunities to do both I think.
	In the long only segment the difference between then and now is perspectively having closed this deal that we will have a platform both to look at transactions and also to kind of achieve that scale.
	But again over time, just on a fee stream basis we do have this strong stable stream of fees coming out of the base fees in the three businesses we have. You’re absolutely right. The fees in this business are lower but the assets tend to be much more durable over a period of time.
	So I think that blend is probably a good thing over all for Fortress.

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Roger Freeman:	Would long only equities be a platform that you would look at as well?
Dan Mudd:	Well I don’t want to speculate to specifically other than to say possibly. I think the way to think about it is that within the investment management sector there are businesses that are more similar to ours. You know they look at the big picture, they determine the sectors they’d like to be in, they do intensive credit analysis. They invest and they monitor their positions along the way. That is very much what Logan Circle that is very much what long only managers do.
	It’s a far cry away from advisory activities or some of the other or some of the other more far flung activities in financial services.
	So we’ll be much closer to those types of businesses and processes that we already know and yes long only equity would certainly be in the spectrum of things we would consider.
Roger Freeman:	Actually you know you kind of bring up an interesting point there. I mean what about more sort of traditional, I don’t know, maybe even like a 40 act macro fund to kind of leverage off of Mike’s expertise because you know you kind of listen to Eaton Vance yesterday you know what element – I mean they’ve got some traditional macro funds that are seeing some pretty strong inputs.
Dan Mudd:	Well as I said you know I won’t speculate on a specific business or a specific structure you know other than to reiterate that you know that prudently, conservatively, of using corporate resources to expand the scope of activities is one of the things you know, one of the three main things that I’ve talked to you and others…
Roger Freeman:	Got it. OK.
Dan Mudd: …	about focusing on here.
Roger Freeman:	All right. There’s one other and then I’ll hop back in the queue in a second. The capital raising allocation kind of talk about so the segments,

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	this year. I mean it is fair to say that probably hybrid private equity is where we continue to see the focus and how is that special – the second special opportunity’s fund raising going?
Dan Mudd:	Well let me start and then get both Pete Briger and Mike Novogratz to pitch in from their perspectives. Both of those businesses hybrid credit and global macro have seen some good inflows, some good conversations with investors.
	At a corporate level we’ve worked pretty hard to build out our fund raising capabilities so that it’s on one hand more focused on the sectors we like and on the other hand more global so we’re covering where the money is going.
	So maybe my two colleagues here could a little bit of sense of color from out there in the world.
Mike Novogratz:	I’ll start with the liquid funds. In the macro fund and the commodity fund we’re seeing healthy demand from the institutional investor base. We’ve taken you know approximately $200 million in a month. That pipeline looks to continue. Nothing can be guaranteed but we certainly see you know a strong demand. Investors broadly want transparency and liquidity and both of our funds provide that.
Pete Briger:	You know on the distressed debt side of things you know the performance has been very good particularly in the private equity a distressed funds. In terms of fund raising I think that you know we’re a bit limited in what we can say on calls like this. But I would say that you know what is out there in the market after a significant run up in liquid credit securities over the last 10 or 11 months, fits our sweet spot more.
	So now we’re going into an illiquid phase. There is going to be lots of financial asset liquidation. There is going to be lots of litigation and so you know I think that a lot of what’s to come fits what we do at Fortress extremely well.
Roger Freeman:	OK. Thanks.

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Dan Mudd:	Thanks, Roger.
Operator:	Your next question comes from Robert Lee with KBW.
Robert Lee:	Thanks, good morning everyone. Just some real quick questions. Actually, Dan Mudd, I guess, I missed the earlier comments about where you were against high water marks in the hybrid hedge fund could you repeat that.
Pete Briger:	Just to point a fine point on that we have two you know significant businesses actually three significant businesses in hybrids but so we have the hedge fund, which is as of yearend roughly 8 percent off the high water marks. And then we have you know our distressed private equity funds, which have a capital paid and ultimate realizations and I think that they are doing extremely well.
Robert Lee:	OK, great. Could maybe you went through I guess Dan Bass went through on the balance sheet a little. Just you know you got the credit rating, you’ve got some you know some cash could you though just update us on what your required debt repayments are on the current facility.
	And you know as you look out ahead I mean is getting near high water marks you know performances better hopefully the prospects for incentive fee generation picks up you know what do you need to see you know later this year into next year for you to start seriously considering about reinstating some type of distribution. Is there a certain you know level of debt you want to get down to or comfortable with or how should we think of that?
Dan Bass:	I’ll take the first part I’ll turn to Dan Mudd regarding the dividend I mean distributions. Right now 384 million out on the credit facility, 42 million remaining for the balance of this year, another 42 million in the beginning 2011 and then 300 million at maturity in 2012. So it’s 42 million for the balance of the year so we feel pretty good that you know from a cash end ratio prospective that those are you know very easy for us to obtain. As relates to the dividend …
Dan Mudd:	Yes, I mean I the dividend is the same answer I think everybody would give you from a corporate perspective is that it is something that we look at on a

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	quarterly basis. It you know it’s on the agenda and it’s really a matter ultimately for the board to decide. So I don’t want to get to far ahead of that other than to say that you know for my taste I think I would I’d like to see a you know a more stable overall external environment. I’d like to see us back into Promote Land across a wider array of funds and to be certain that we’re kind of as we go back toward a dividend you know we’re on we’re on a sustainable and growing basis for that. So that’s probably as much as I can say right now.
Robert Lee:	OK that was it thank you.
Dan Mudd:	Yes.
Operator:	Your next question comes from Chris Kotowski with Oppenheimer.
Chris Kotowski:	Yes, good morning. If we look at your private equity business, base management fees went from 32 million last quarter to this 22 million this quarter and that you know as a percent of AUM you know it dropped pretty substantially I think like you know from I don’t have it right in front of me but like from 130 basis points to like just under 80 what happened there?
Dan Bass:	(Chris) we took a $11 million one-time reserve for Intrawest management fees, which has, which you really have to reinstate to get back to you know the 30 plus million dollars a quarter, which would which would show you that the run rate is actually up ex that reserve.
Chris Kotowski:	OK. So but if there aren’t ongoing management fees going for I mean do you expect management fees from that going forward?
Dan Bass:	No. We have we have no we don’t include in the 32 million run rate is zero for the fund that we took the reserve against. So that has no impact on the run rate it was a one-time reserve.
Chris Kotowski:	OK and then was there some kind of oh I think I know the answer then OK. Because for the nine months it showed 120 million in fees but for the full year 131 and you had 22 million in fees. So the 11 gets netted against the 22.

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Dan Bass:	Yes, right.
Chris Kotowski:	OK. Then the 100 or the 1.5 billion in redemptions in the hybrid funds is that the same 1.5 billion that was in September I assume.
Dan Bass:	Yes, yes the investors only have once a year as of September 30th to make that election. So yes, it’s the same number.
Chris Kotowski:	OK. And then in your September 10Q in your third quarter Q I mean it looked like Brookdale was valued below cost at that time. And if you monetize this quarter how did that generate performance fees?
Dan Bass:	No, above cost I mean if you if you look on our 10 I think it’s reversed our value is about two and a half times our cost. It is also as I mentioned it was our earlier funds from the standpoint of funds one and two they bought Brookdale at a much earlier basis.
Chris Kotowski:	OK.
Dan Bass:	Earlier time.
Chris Kotowski:	All right. And then could you just flush out a little bit on the $27 million claw back release, how did that come about?
Dan Bass:	At the end of 2008 we took approximately a $40 million gross or $38 million gross reserve for potential claw back against our fund two you know that with Brookdale recovering its value it’s down value you know close to three or four bucks at the close of 2008. It recovered to 16 plus we sold the sold the investment and returned the investors capital and effectively shuts off some of that you know. Eliminates a lot of the potentials most of the potential are claw back on that fund so we released the reserve.
Chris Kotowski:	OK terrific thank you.
Dan Mudd:	Thanks (Chris).
Operator:	Your next question comes from Craig Siegenthaler with Credit Suisse.

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Craig Siegenthaler:	Thanks and good morning everyone. First just a just a question on Logan Circle because my other ones were already asked and I apologize if you already mentioned this on the pre-prepared remarks. But when we think about Logan Circle, you know what quarter would actually hit the P&L? And when you think about the C rate and the earnings impact, which seems quite small relative to your current earnings you know how do we think about the timing of this? And also, the P&L and will you actually break this out as kind of a separate AUM roll forth?
Dan Mudd:	Yes, it’s a terrific question (Craig). I for our purposes and your purposes I would think of it as neither accretive nor diluted for 2010 building gradually from 11 and beyond you know unless we were to you know announce something incremental along the way. I would say that when it gets to the point to, which obviously we hope it will or we wouldn’t have done the transaction. When it gets to the point of being material with comparison to the other businesses then we would probably break it out in a segment.
	But that’s probably multiple quarters off right.
	I don’t know Dan if you have any additional perspective on that.
Dan Bass:	No, it’s forecasted to close in the second quarter you know…
Dan Mudd:	So it will be a mid-year close.
Dan Bass:	There will not be anything reflected in our first quarter results.
Craig Siegenthaler:	OK, got it and then just one more question. When you look at the hybrid private equity business was there anything unusual in the redemption in the fourth quarter and can you also comment on seasonality around flows to the segment?
Dan Bass:	The hybrid PE there are no redemptions in that business. Any outflows would be for realizations and return of capital to investors. So any outflows in that business are just returns of capital because we’ve sold the investment. There are no redemptions you know from that business.

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Craig Siegenthaler:	And there is also no seasonality impact, right? Just the timing of the capital realization?
Dan Bass:	Yes, no seasonality.
Craig Siegenthaler:	OK, thanks for taking my questions.
Operator:	Your next question comes from Dan Fannon with Jefferies.
Dan Fannon:	Good morning. In terms of capital raising as you guys are out talking to people today are you looking to get capital for longer periods of time or get longer lockups or you know any discussion around fee changes from your current kind of set of funds?
Dan Mudd:	Let me start and just by virtue of the nature of the question I’ll have to be a little bit generic about it. I think the structure really depends upon the type of business that we’re in. So you see a continuation of you know a typical hedge fund structure in global macro and as you see Pete’s team working their way through a longer revaluation, recovery restructuring cycle it would obviously be preferable to have a longer-term capital structure there.
	There has always been – well actually everybody else – my colleagues here in the room have a longer perspective on it than I do but there has always been a pretty healthy dynamic attention around fees and terms and investment parameters and so forth.
	And you know that continues. I would say that has a broad characterization investors, allocators post 2008 have been much more detailed and much more attenuated in terms of their investment process and their diligence process.

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	And all of us in the room are spending a lot of time on that. That’s – I think that’s proven to be a pretty good thing because generally speaking the more people know about who we are and what we do and what are results are and what our investment philosophy is and they have the additional you know transparency of calls like this and documents like this they tend to get pretty comfortable.
Dan Fannon:	OK so is there anything through those dialogues that you guys are looking to do to change to adapt to some of the, I guess, increased scrutiny that they’re looking for or more transparency whether I guess you could refresh us also do you already use like third party administrators and things like that you know we’re hearing you know more of the institutions consultants are looking at.
Dan Mudd:	Did you want to jump in?
Mike Novogratz:	Sure, just two points on the liquid space. You know we’re seeing more so than fee pressure is liquidity pressure. We’ve actually just launched a one-month – a monthly liquidity share class with a 2 and 25 fee structure. So actually kind of premium fees to the normal share class where there seems to be good investor demand.
	So they’re more focused at least in the liquid portion on making sure they’ve got liquidity. Our funds already use third party administrators. We have since we started.
Dan Fannon:	Great and then Dan Bass, could you remind us what is the determination to actually take a mark through the P&L through the mark after it’s been written down so the Flagler example from this quarter.
	And then it seems if there is nothing else on the books, I think you said, on the balance sheet that’s written – that’s being carried below cost. Is that correct?

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Dan Bass:	Yes, to answer you second question the answer is yes. In fact, we have $150 million of embedded gains that will only be reflected upon – when we realize those investments. But on the impairment side pretty simple we look at two things, time and magnitude.
	Time – magnitude when value is less than cost and how sizable that is and then secondly time is how many quarters that relationship has existed. You know it’s really a bright line test but when things start to push greater than 20 percent below our cost and then there is the series of three, five, seven quarters when that exists you know accounting rules sort of puts you into recognizing an impairment and that’s what occurred in our situation.
	And at this point has picked up everything that has the situation where value is less than cost. And obviously this is also you know detailed in great color in our 10-K and Qs.
Dan Fannon:	Great, thank you.
Operator:	Your next question comes from Roger Smith with Macquarie.
Roger Smith:	Hi, thanks very much. My first question is on the reserves that were associated with Intrawest on the management fee side. Is the investment also then written down on the management or the AUM segment and how do we see that sort of in the roll forward of the assets?
Dan Bass:	Yes, asset is written down for AUM purposes. And it is adjusted – it’s a component of the private equity division segments performance every time you see that performance line it’s a component thereof.
	And so the investment value reduces AUM.
Roger Smith:	OK, I got it on the – and then are there any other investments out there that you’ve waived fees on, on the private equities side besides Intrawest?
Dan Bass:	Well we haven’t waived fees. We’re just reserved.

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Roger Smith:	That’s right.
Dan Bass:	The flexibility of it and no is the answer.
Roger Smith:	OK. On the I guess unrealized gains in the hybrid portfolio – the hybrid PE piece. I guess that was a committed capital in the past is that now at invested capital or is there still some you know unrealized gains on that portfolio. And could you tell us how big that would be?
Pete Briger:	First of all the way that fund structure works is you have recallable capital so you can invest capital, you can realize capital and you can reinvest for a three year period in the funds. In terms of unrealized gains, I think that we are a little bit restricted in terms of what information we can give out on a call like this.
	The funds have done well, they continue to do well into this year. And we have you know a significant amount of dry powder to invest in a market that we know extremely well.
Roger Smith:	OK great and then I guess on the liquid SPV. It sounds – I just want to make sure I have my numbers right. It – does it sound like there is about $200 million left in that at this point in time?
Mike Novogratz:	Actually $375 million left at this time. So those SPVs start at a billion six, and we’ve given $1 billion 1775 back and so we’ve given 112 percent of the initial SPV back and there’s another $375 million to go. It’s got an August 1st expiration date so, that capital will be returned by then.
Roger Smith:	OK, great. And then on the investment portfolio when you write this stuff down, are you allowed to write this back up or really once you write it down it has to be then written back only when you realize that gain?
Mike Novogratz:	Correct.
Roger Smith:	OK, and then just on my last question, on the hedge fund business right now, you know you guys being a larger fund out there, there’s more due diligence questions going on, what sort of changing in the questions that you’re getting from investors when they’re looking to invest in this business?

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	And when do you think that more of this activity will start to happen from that base?
Pete Briger:	I think that you know in a world of increased scrutiny you know of more of an FCC presence et cetera, I think that investors are appreciating that you know we’re a public company. We’re an FCC registered investment advisor.
	And so we see that as a positive. These calls, your guy’s ability to ask these questions, go through our financial statements I think in a period like this you know is a big positive. We do you know see a lot more bottoms up due diligence from investors going on and so that, I think is to our advantage.
Dan Mudd:	Well I mean – this is Dan Mudd. I mean one of the conversations that I have with folks is you know you do have this attenuated series of discussions and investors appropriately want to meet a broad array of the investors and understand the track record and all that.
	Two things, I mean one is that we have the ability to say at the end of the day you know you don’t need to rely exclusively on this conversation and these representations. This is all really a matter of public record and as a public company, you know we talk about it, we sign for it, and we stand behind it.
	I think that, that you know in this environment does give a little bit of trust and confidence. It takes some explanation to get there, but I think net it’s been positive for us.
Roger Smith:	Great, thanks very much.
Dan Mudd:	Thank you.
Operator:	Your next question comes from Marc Irizarry with Goldman Sachs.
Marc Irizarry:	Good morning guys, it’s actually Alex Bolstein filling in for Marc. Most of our questions have been answered. I just wanted to drill down a little bit more on the margin on sort of the fear related side of the business.

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	Now can you give a little bit I guess more color on the step down I guess in private equity management fees and also at the same time the pickup in expenses. It looks like the margin in that business keeps sliding.
	So as we go out into next year is this kind of like a good run rate to think about or should we see you know movement either up or down?
Dan Bass:	Yes I mean we target the 40 to 50 percent range. I think the way to think about it is it’s going to be in the lower end of that range if we’re not recognizing incentive income and it’s going to be in the higher end of that range if we recognize incentive incomes.
	So I think the 40 to 50 percent, you just think about it on that continuum and in those drivers.
Alex Blostein:	All right. Makes sense, thanks.
Operator:	Your next question comes from Roger Freeman with Barclays Capital.
Roger Freeman:	I just have a few follow ups. I guess first in hybrid private equity fund, the – can you just kind of go through the realizations there. It is actually a fair amount. Is that all from the initial special opportunities, just the credit opportunities fund?
Dan Bass:	It’s predominantly from the credit opportunities fund, yes.
Roger Freeman:	OK I mean – let me ask you this. Has there been – is there much pressure from investors to return capital to kind of you know obviously mark these up nicely to actually show some returns or position of function of the you know times right to sell some of these.
Pete Briger:	A couple of things to say is there no pressure from investors to return capital. I think that in all the funds that we’ve raised in hybrids just denoted by the name hybrid you have you know really assets liability management that’s perfect so…
Roger Freeman:	Yes.

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Pete Briger:	So the investment that we invest in are illiquid. Investors understand that they were making investments in illiquid assets and so you have the pressure to return capital is really muted.
	In terms of you know our taking advantage of the markets in the late part of ‘08 and ‘09 most of those investments were done in very liquid securities because that’s what made the most sense to buy and those securities were for sale at prices …
Roger Freeman:	Right.
Pete Briger:	with durations that were favorable and so from our prospective, you know the marks on those portfolios are extremely precise because you know a significant percentage of them are marked by you know numerous people in the broker dealer community on a daily basis.
Roger Freeman:	Yes.
Pete Briger:	As the market opportunity goes away as it has for public market credit, and it becomes more interesting in the private market credit areas you know in RTC like transactions what we’re calling the great liquidation and the great litigation, you will see us invest in more illiquid investments where you know the marks will less precise.
	There will be more valuation oriented but we’ll be buying in at a much bigger discount to intrinsic value than you know obviously what is available in the public markets. So you know from our perspective, in the distressed area the opportunity in the public market credit especially in the senior part of the capital structure where you’re not making investments to you know control companies or to control real estate or control other assets.
	That opportunity is for all practical purposes for a fund that wants to deliver the types of returns that we want to over. And so we’re transitioning to the private opt markets opportunity you know the more RTC like opportunities or what we like to call a dogs breakfast.

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Roger Freeman:	Yes. OK, so that’s helpful so it stands to reason then that you know there could be a lull here in realizations as that transition happens because these are going to be longer data investments. They could be.
Pete Briger:	Well I would say that you know obviously realization and the creation of promote you know is an erratic process in the private equity business. You know we obviously haven’t taken any promote from these businesses or what has been taken has been very small.
	And I would also say on future investments that we make in these RTC like portfolios they tend to have shorter dated realizations that a typical private equity investment…
Roger Freeman:	Sure.
Pete Briger:	There is a lot of cash that comes back so I’m not sure that you know your last point of sort of longer term you know there will be realizations but not shorter term is exactly correct.
Roger Freeman:	Well, I just meant over a couple of quarters as opposed to that you would had you know windfalls in the next one to two quarters but I guess the other thing is you – I think that credit fund right was like a $3 billion fund. You called a couple of billion dollars and now you’re returning I guess 700 or so. I know it’s kind of round numbers but does that mean that you still have sort of 1 billion in change this is invested?
Pete Briger:	I don’t think there is you know a lot of public information available with respect to the you know inflows and outflows of that capital …
Roger Freeman:	Got it.
Pete Briger:	But I will say that the way the funds work are we could invest considerably more than 100 percent of the 3 billion because we would invest it. It would come back. It would be reinvested et cetera, so.
Roger Freeman:	Right. Yes. OK. That’s all. Hey, Wes, we’ve talked to you this call yet. I guess – can I ask you a question just in terms of how you’re kind of viewing

Fortress Investment Group, LLC

Moderator: Lilly Donohue

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	the world right now? Where you see the opportunities you’ve been insurance and banks. What do you think – I mean just in terms of many capital raising too. Do you think that anything you do will be sort of more targeted and what dry powder can you just remind us the dry powder you still have from previously.
Wes Edens:	Well, the opportunities that we see are pretty specific. You know the number of the underlying businesses are doing well. As Dan said, when you look across the portfolio, in the aggregate I think that the average net kind of earnings across the entire portfolio last year and during a pretty difficult period was up double digit numbers.
	It was up about 11 percent cross the entire portfolio. And with really the exception of one of the 19 companies I can say that all the bad performance for the most part happened earlier in the year and so thus not only were the aggregate numbers good but the trend line over the course of the year has been very good.
	Notable sectors that I think have both you know great fundamentals as well as there is an availability of a lot of investment prospectively are the transportation businesses and healthcare businesses.
	So obviously our healthcare focus has been on the senior living side. There are lots of related and ancillary businesses there we think are interesting. I think you’ll see us making some headway there this year.
	Transportation related stuff where we’ve got a whole you know plethora of different businesses albeit you know containers or ships or railroads, airplanes. I think one the broad picture observations is that with the death of the finance businesses. There are so many finance companies that have restructured an amount of business.
	I think the ability to make meaningful investments at really attractive levels and those sectors are there and that’s something I think you will see from us but directly in terms of capital formation over the course of the year.

Fortress Investment Group, LLC

Moderator: Lilly Donohue

02-25-10/8:00 a.m. EST

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	So you know it’s still a process of trying to optimize and do the best job with all of our existing investments. We’ve made lots and lots of headway. There is one or two things that we’re still very focused on you know on the negative side but the balance of it you know it’s amazing what a difference a year makes, so.
Roger Freeman:	Right and what do you have for available capital that you can still call?
Wes Edens:	It’s a handful of hundreds of millions of dollars depend on how we count it. So it…
Roger Freeman:	Got it.
Wes Edens:	But there is still you know and depending on how much we reserve in different investments et cetera it’s probably you know like I said a handful of hundreds of millions of dollars kind of net, so.
Roger Freeman:	Got it. OK. All right. Thanks.
Wes Edens:	Yes.
Operator:	At this time we have reached the end of the allotted time for questions and answers. I will now turn the conference back over to Dan Mudd for closing remarks.
Dan Mudd:	Well very quickly just thanks very much for listening. The summary is I think we came out of ‘09 with positive momentum that’s continuing into early ‘10 performances everybody discussed is up but there is more to do there. The transaction flow is very good and very interesting and we’ll continue to prudently look at opportunities to kind of build out the scope of our activities.
	So thanks for the time and we’ll look forward to talking to you next quarter.
Operator:	Thank you. This concludes today’s conference call. You may now disconnect.

END