Wes Edens is widely known for his ownership of the Bucks basketball team. He is also an accomplished businessman and a private investor. In the year 2014, he partnered with Lasry to purchase the Bucks from Herb Kohl at $550 million. Today, the team has appreciated to $1 billion. In 1984, he attained his Bachelors in Finance and Business Administration from Oregon State University. After graduation, he kicked off his career at a California bank before moving to Lehman Brothers as a partner and a managing director.In the year 1993, he joined BlackRock’s private equity division and served as an associate and an MD till 1997. In 1998, he realized his major breakthrough when he partnered with Michael Edward, Randal Nardone, Peter Briger and Robert Kauffman to launch Fortress Investment Group.
In 2009, he became the Co-Chairman of the Board of Directors of the firm.He was also tasked to run Fortress’s private equity business by virtue of his extensive knowledge and expertise. Wes Edens was the reason behind Fortress’s purchase of subprime lender Springleaf Financial Services.This made Fortress the Springleaf’s majority stakeholder and by 2015, the value of Springleaf had exponentially risen to over $3.5 billion. In the year 2006, Fortress Investment Group purchased Nationstar Mortgage formerly called Centex Home Equity Company at $575 million.It is a subprime home equity mortgage lender. Wes Edens was appointed the chairman of the group to oversee its operations. His annual earnings according to Bizjournals stands at a skyrocketing $54.4 million.
This includes his annual compensation from Fortress Investment group of about $13.4 million and $41 million in dividends he receives as a shareholder.He earns almost $1.1 million in stock awards, an $11.6 million in bonuses, $478400 in other compensations and a salary of $200,000. In January 2018, he confirmed that he would sell his main business Fortress Investment Group to the Japanese side Softbank Group Corporation at a cost of $3.3 billion in cash.The company would, however, retain its headquarters in New York. Wes Edens would also secure his position together with Randal Nardone in a five-year contract. He is married to Lynn Edens and together they have 4 children. He is also renowned for his philanthropic work, he majorly donates to education, health, and art organizations. Apart from business, he is also interested in horse riding and mountain climbing. He has climbed Mt. Kilimanjaro in Tanzania.
The Fortress Investment Group was on the cutting edge of hedge funds becoming the first to go public in 2007. This allowed it to lead the financial industry. What does the Fortress Investment Group provide to SoftBank Vision 2.0?
What financial function does the Fortress Investment Group perform? The Fortress Investment Group is an intermediary. It has used its strong group of talented financial experts to remake companies.This human capital can peruse the landscape for good assets to buy. Which companies had fixable problems? These financial experts would determine which mergers, acquisitions and IPOs were best for their bottom line.The Fortress purchased railways, resorts, casinos, racetracks and senior living homes primarily. The Fortress strength seemed to focus on physical, brick-and-mortar businesses with land.Some might refer to the Fortress strategy as “Old Economy.” They did not have a lot of Internet, Dot.com or Web-based brands under their umbrella. Some wonder if this Old Economy Strategy was in tune with the cutting-edge SoftBank Vision 2.0 Strategy.
2000s Smart Phone
All that you have to do is look at the names of Fortress and SoftBank. The Fortress hearkens back to the days of knights in shining armor. It evokes an image of a strong, concrete fortress of stone. It focused more on companies with property, not just websites.The SoftBank refers to the Internet, Web and software that use computer languages to make things work. Many of the SoftBank purchases have been for cutting-edge technologies, like Nvidia and Uber.As the world has added smart phone technology, traditional brick-and-mortar assets have taken a backseat. These are not seen as being as glitzy. They still might offer a solid return on investment (ROI), but they seem to be technologically-challenged.
Next Generation Technology
The 2008 Sub-Prime Mortgage Crisis might have also hit the Fortress Investment Group asset portfolio particularly hard. Because its assets had significant amounts of land, their real estate assets might have lost some value. The United States has also been de-industrialized.Some might have been surprised by the SoftBank purchase of Fortress in 2017. Yet, Fortress offered at least three strengths: 1. Land, 2. Human Capital and 3. American Access. SoftBank might be trying to upgrade brick-and-mortar assets to a more futuristic functionality.The SoftBank Vision 2.0 Strategy is to buy assets that will add to the future infrastructure of the world. These brands will become household names. How do the Fortress Investment Group assets fit in?When SoftBank purchased the Fortress Investment Group, it did not replace the principals. The Fortress Investment Group principals had valuable connections and expertise that could not be replicated. This human capital could provide SoftBank with the expertise to purchase more assets for its Vision 2.0 Strategy. Finding valuable assets might be the easy part. Finding valuable assets that are undervalued is very challenging. Perhaps, the Fortress Investment Group principals will be key factors in purchasing the next group of global assets for the SoftBank Vision 2.0 Strategy.