Fortress Investment Group recently expanded its investment strategy to offer its investors a totally secured investment in iPass, a leading worldwide provider of global connectivity options. The amount of the funding totaled $20 million, $10 million of which was available immediately to iPass. Gary Griffiths, iPass CEO and President, commented, “With our balance sheet strengthened by this financing, we can shift focus back to growing our revenue and closing the gap to profitability. Moreover, using our patents as the security for this loan brings credibility to the prowess of the patents that provide the basis for iPass SmartConnect and Veri-Fi product families.”
The loan is secured by all of iPass’s considerable assets that include its SmartConnect technology and patent portfolio. Riley Financial, Inc., brokered the deal. Riley Financial, which operates in four segments–Auction and Liquidation, Capital Markets, Principal Investments and Valuation and Appraisal–is an investment bank that specializes in putting together these kinds of high-profile deals. The company is well-regarded in the financial world for its highly ranked equity research. The company understands the value of equity, and the iPass-Fortress deal obviously met or exceeded the company’s valuation protocols.
iPass Operates the World’s Largest Wi-Fi Network
iPass operates the world’s largest Wi-Fi network that enables consumers and businesses to access millions of Wi-Fi hotspots to enjoy always-on Wi-Fi. Designed as a Software-as-a-Service, or SaaS, application, iPass Wi-Fi provides strong value to customers with unlimited Wi-Fi on an unlimited number of devices. Customers can access more than 64 million hotspots worldwide. These include hotels, airports, restaurants, train stations, outdoor entertainment venues and convention centers.
The number of hotspots is expected to grow to 340 million by the end of 2018. Exponential growth in Wi-Fi technology makes iPass a good investment for Fortress, and its investors can certainly appreciate the wisdom of investing in Wi-Fi technology.
Under the agreement with Fortress Investment Group, iPass gets immediate access to $10 million. iPass Unlimited is transforming into a cloud-based business, and third-party analysis by Maravedis Rethink found that there will be more than 340 million global hotspots by the end of 2018. iPass hopes to leverage many of these in its business model to provide unlimited Wi-Fi to individuals and companies. This demand has been recognized by forward-thinking companies such as HP and Microsoft. Fortress joins these elite companies by investing in iPass and its cloud-based SaaS strategy.
FIG Expands Its Influence in Critical Areas
Fortress Investment Group was organized in 1998 and became the first private-equity investment group to go public. The company has always been a trendsetter and prefers to invest in areas where its clients can receive strong risk-adjusted returns for long-term investing strategies. Investing in iPass is a perfect match for this philosophy because iPass offers astonishing convenience in Wi-Fi access, which is only going to become more popular over time as companies and individuals increasingly work on-the-go and in extraterritorial work environments. Many people now combine work and vacationing year-round, and iPass technology can enable Wi-Fi access at millions of global hotspots.
The deal between Fortress and iPass is secured by iPass assets and patents that provide the basis for Veri-Fi products and iPass SmartConnect, which enables customers to enjoy the best roaming experience available. SmartConnect software learns from experience to build a real-time picture of available networks so that customers can make wiser connection decisions. Fortress Investment Group made a wise decision to support this technology with investment capital. Fortress employs 900 people and is headquartered in New York where it manages more than $40 billion in assets for more than 1,750 investors.
Fortress recently raised $2.9 billion in May of 2017 in its sixth round of funding. Fortress earned more a 39.7-percent return for its private investors between 1999 and 2006. The company launched on the New York Stock exchange on February 9, 2007, and by June 30, 2016, it managed more than $70.2 billion in alternative assets.
Fortress was named “Institutional Hedge Fund Manager of the Year” by Institutional investor Magazine on June 30, 2014. The company has won many other types of recognition from peers in the financial industry, and the company employs more than 953 asset management professionals in its New York and affiliate offices around the world.
It’s likely that iPass can lock down a competitive advantage with $20 million in funding and become profitable quicker than planned. Simple, secure Wi-Fi will likely remain a wise investment for the foreseeable future. $10 million, or half of the deal, has already been drawn down for iPass to use. As of March 31, 2018, Fortress manages about $40.9 billion in assets. This deal promises to raise the profile of both parties and deliver long-term dividends to investors.
This is not the only time that Fortress has been in the news recently. It’s been making waves in a wide range of areas and industries and is sure to continue. Here’s a collection of some of the most recent and most dramatic news stories with which Fortress has been involved. You might be surprised to find out that their influence is growing at an even more impressive rate than you originally expected, with an eye on the future that’s second to none. Soon Fortress will have a household name-level reach that matches their influence within their industry. So without further ado, let’s take a look at some recent news stories relating to Fortress.
Purchase of Fortress by Softbank
In a distinct move that made waves across the industry, tech-focused firm Softbank purchased Fortress for a massively impressive cash value of $3.3 billion. This was seen as a surprising move for Softbank, which doesn’t have the same traditional financial or real estate focus as some other more standard firms in New York and across the world. The move was described as unexpected, but it’s already proving to be an astute move that’s gaining respect across the industry.
Softbank certainly isn’t a stranger to investing in innovative startups like Fortress Investment Group. But what specific value does the $40 billion assets of Fortress Investment Group bring to Softbank? Apparently, the move was centered around the focus of developing an alternative asset segment to Softbank’s investing enterprise.
A small team has been searching for lucrative deals at Softbank’s offices across the world for some time, and now they’ve found one able to offer a more define structure to improve relationships with their investors as well as compliancy and trading. The Fortress Investment Group purchase also adds a talented and experienced investment committee that’s guaranteed to make an impressive impact.
With this new acquisition, Softbank is developing a new arm based out of London that they’re calling Softbank Financial Services. Spearheaded by Rajeev Misra, this 1,000-strong collection of employees will have the goal of becoming “one of the largest managers of alternative assets in the world.” This is big talk, but can the purchase of Fortress Investment Group back it up with actual results?
It seems that they can. Already, Fortress Investment Group is continuing its work as if not much has changed. But big moves are in the work. Many experts are beginning to suspect that SoftBank will be accessing Fortress Investment Group’s considerable reach into the real estate market throughout New York. You might recall that Fortress Investment Group manages over $40 billion in assets, led by co-heads Wesley Edens and Peter Briger. Perhaps their most famous move came when they sold the Peter Cooper Village for over $5 billion a few years back.
Lest anyone believe that SoftBank was the only party to benefit from this purchase, Fortress is now enjoying some pleasurable benefits of its own. Not least of these is the fact that Fortress has now returned to private company status. This historic move marks the first time in US history that any private equity company has removed itself from public trading.
So why the return to privacy? Apparently Fortress Investment Group executives weren’t particularly pleased with their time as a publicly traded company. They were disappointed in the volatility of stocks and how short-term goals from their investors seemed to kick against the company’s instinct for long-term planning and goalsetting as well as strategic acquisitions.
But the benefits don’t end there for Fortress Investment Group. They can now access the small network of contacts that SoftBank holds in Asian markets, allowing them to expand their global reach and access as yet untapped opportunities.
And these aren’t the only waves Fortress Investment Group has been making recently.
All Aboard Florida
All Aboard Florida, a rail service company owned by Fortress Investment Group, was recently awarded nearly $2 billion in bonds from the government to expand its transportation services in Florida, primarily in the Orlando area. They were awarded the bonds by the Florida Development Finance Corp. in order to move on to phase two of their Brightline project.
This is a much-needed and empowering win for the high-speed rail project. Along its journey it had hit a few walls, including a bit of opposition from local voices. However, assessments have shown that the Brightline will bring in additional money and spur growth in the state economy. It will also help the environment and state quality of living—more rail options mean less cars on the highway and more opportunities for tourists to come visit and spend money.
Future projects for Brightline include service from Miami, plus a rail line from Orlando to West Palm Beach. They’re also planning to develop a route that will run from Orlando to Tampa. This is yet another growth point for Fortress Investment Group as they expand their reach in diverse markets around the world.
But the Brightline project isn’t done yet.
Just this past week, Brightline scored an astounding win—they acquired the rights to the project that will connect Los Angeles and Las Vegas via high-speed rail. This project, which promises to create a two hour travel time between the two major cities (currently a drive time of over 5 hours) and completely transform the accessibility of both cities.
This project is guaranteed to have massive ramifications for both states and for commuters and tourists everywhere—it’s estimated that more than 50 million trips are taken between LA and Las Vegas every year. As of right now, they have exactly zero options for rail service, so all of that travel takes place by air or road travel. This new ultrafast rail will help alleviate the burden of one of the country’s most heavily used stretches of highway.
The journey from Las Vegas to Los Angeles is seen as a perfect test of the benefits of hyperspeed rails, as it’s a route often considered to be slightly too short for taking a flight and slightly too long for the average road trip. This trait, combined with the high level of use of this route, makes it an ideal test case for the benefits of high-speed rail and how they can connect Americans around the country.
Fortress Investment Group, the organization that owns Brightline, spoke recently on how their high-speed rails in the Florida area have shown that there is a demand and opportunity for high-speed rail services to achieve success. Their co-founder, Wes Edens, spoke about how the idea of privately-owned companies making dramatic improvements to transportation infrastructure is now becoming a proven reality.
As far as scheduling is concerned, the new high-speed rail is expected to officially begin construction as early as 2019. The most daunting task is building the rail line itself, which must traverse over 180 miles across desert landscapes, hills and mountains between the two major cities.
Even more ambitious, Brightline plans to finish the project by 2022, before adding more stations that will even connect with state commuter rails in California. Brightline also plans to purchase a large section of land directly adjacent to the strip in downtown Las Vegas in order to construct a “major intermodal hub” designed to be a one-stop shop for transportation of all kinds.
But Fortress Investment Group has even bigger plans beyond their high-speed rail project.
The TSX Brodway Project
In the center of Times Square, where West 47th Street and 7th Avenue meet, sits a large building at 1568 Broadway. But not for long. Currently occupied by a Hilton hotel, the building is set to be demolished and redeveloped into 46-story skyscraper that will be known as TSX Broadway. This project is being partially managed by, you guessed it, Fortress Investment Group. The redevelopment has a stated budget of almost $2.5 billion and will be co-sponsored by L&L Holding and Maefield. Meanwhile, the skyscraper will also perfectly connect with the Palace Theater, an adjacent landmark with a century-old history. In a stunning feat of engineering, the theater will be literally lifted out of its foundation and rise several yards above the level of the street to be preserved for years to come.
So what is the plan for this massive, striking new retail space? It’s all about harnessing current market trends to bring marketing experiences to customers from all over the world that come through Times Square on a regular basis. This will include storefronts, retail spaces, and multi-platform experiences designed to draw in customers and leave them with an unforgettable experience. The skyscraper will even feature an outdoor platform that will jut out over the sidewalk and offer a performance space and other opportunities.
The building will also feature a massive outdoor terrace, conceptually expected to be used for a large food space with as much as 10,000 square feet of dining—the largest area available anywhere in all of Times Square.
But perhaps most visually distinctive will be the massive, low-level digital billboard, which wraps around the building in a smooth curve and will serve as an eye-catching attraction in its own right.
The project has been cast in the light of continuing the tradition of innovation that Times Square has always stood for. The involved parties all hope that the new TSX Broadway building will be the first step toward launching Times Square into the future and bringing modern advertising and experimental principles to millions of visitors from all across the globe.
But this project isn’t just about moving into the future—it’s also about preserving the past. Included in the budget is a $50 million renovation of the Palace Theater, including a full restoration of its interior and primary structure.
The Future of Fortress Investment Group
All of these projects add up to paint a picture of FIG as a truly cutting-edge firm on a course to transform multiple industries at once. From their purchase by SoftBank to their high-speed rail and skyscraper development projects, Fortress Investment Group has shown its ability to transcend any one industry or market and make its presence known across a wide range of industries.
Overall, watching the next moves of Fortress Investment Group is certain to be a fascinating endeavor. As they adapt to their new role under the ownership of SoftBank, they plan to continue their practice of innovation and exploration of ever-expanding markets and industry endeavors.