NEW YORK (HedgeWorld.com)–The phones at Fortress Investment Group LLC began ringing Thursday morning, and had not stopped by afternoon. The subject of all the calls? Michael Jackson.
Yes, that Michael Jackson.
Lilly Donohue, head of investor relations at Fortress, which manages US$15 billion in capital, spent the day issuing polite “no comment” statements to reporters asking about news that Fortress had purchased two loans, estimated at a total of US$270 million, originally issued to the former pop singer by Bank of America.
According to a story posted on CNN Money that quoted “people familiar with the matter,” B of A sold the loans to Fortress. Which would make sense, based on Fortress’s investment history, which includes a special situations fund that, according to the firm’s website, “originates and purchases high yield loans made to acquirers of distressed assets, obligors who need cash quickly to take advantage of an opportunity and obligors who are asset rich and liquidity poor.”
The latter would certainly describe Mr. Jackson, who is currently on trial for alleged child molestation. Mr. Jackson’s lavish spending habits have been well-documented, as have his debt-financing strategies. As collateral for the hundreds of millions in loans he has taken out, Mr. Jackson has pledged a part of the Beatles song catalog he owns jointly with Sony, a venture worth an estimated US$400 million. He has also pledged the copyrights to his own songs, estimated to be worth about US$75 million.
“Fortress was founded in 1998, and has a strong policy that we don’t talk about prospective investments or existing investments,” Ms. Donohue said. She declined to confirm the other published reports, saying there were so many floating around it was better not to comment.
No doubt many in the hedge fund industry never thought they would see the day when “hedge funds” appeared in the same story, let alone the same sentence as “Michael Jackson.” Adding further insult to whatever injury this episode has caused those people, CNN Money included in its story a link to an online poll that asked who should own the Beatles’ songs: Michael Jackson, hedge funds, the Beatles or the public?
As of about 5:45 p.m. EDT, 12,872 people had responded to the poll. Only 4% thought hedge funds should own the songs. Seventy-eight percent said the Beatles, 11% said the songs should be in the public domain and 6% said Michael Jackson.
Contact Bob Keane with questions or comments at: firstname.lastname@example.org.