Private Equity 12 Feb 2007 07:41 am

Fortress IPO Zooms Higher

by Sean Hackbarth

Fortress logo

The private equity/hedge fund player Fortress Investment Group (FIG) gave life to the IPO markets Friday with shares almost doubling.

Will we see more hedge funds hit the U.S. stock markets? With Fortress’ good start the answer is yes. Just don’t expect a flood of them:

But experts noted that only the most established hedge funds, with multiple trading strategies and a history of trading success will tap the public markets.

“No one is going to be interested in doing an IPO for a $500 million firm,” said John Van, chief operating officer of Greenwich Alternative Investments, a hedge fund research firm. “A company would have to have billions of dollars for an IPO to make sense.”

Hedge funds like public markets because their capital source is more stable. Stockholders can buy and sell their shares on the open market instead of pulling their money out of the fund once a quarter.

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