Central Oregon & Pacific - Fortress

Central Oregon & Pacific - Fortress

Posted in the Coquille Forum

RailPundit

Delray Beach, FL

#1 Oct 9, 2007
Fortress Fund V, L.P.Brad Child introduced Allison Thrush of the Fortress Investment Group to discuss the proposed investment. OPERF has made a total of $450 million in commitments to four prior Fortress sponsored funds:$125 million to FortressInvestment Fund IV (“Fund IV”),$100 million to Fortress Residential Investment Deutschland (“FRID”),$125 million to Fortress Investment Fund III (“Fund III”) and $100 million to Fortress Investment Fund II (“Fund II”). FundV will follow the same successful investment strategy followed by previous Fortress funds in that it will target a broad range of real estate and other asset
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5/30/2007 OIC Minutes- 6 -backed investments located in the United States and Western Europe (primarily the United Kingdom, Italy and Germany). The Fund will seek to realize a net internal rate of return of at least 20%, using 65% leverage. Net IRR yields on previous Fortress funds, over the past decade, range from the high teens to almost 60%. This track record shows a consistent ability tosource opportunities and then execute financial and management strategies to produce profits. In North America, Fortress will seek to take advantage of rising interest rates and energy prices by considering: 1) sub-credit debt portfolios at a discount; 2) transportation industry investments (such as railroad companies with strong cash flows); and 3) real estate holdings thatmay need corporate restructuring to maximize their value. In Europe, Fortress will look for opportunities created by corporate and government restructuring where real estate holdings are being underutilized. One such target may be health care facilities in Germany, which play off the country’s aging demographics and will take advantage of the expertise Fortress has developed with similar investments in the United States. Ms. Thrush reviewed the Fortress track record and outlined the investment strategy and current investment opportunities. She answered questions fromthe Council. Brad Child and Nori Lietz addressed questions from the OIC and reviewed the staff recommendation. MOTION: Randall Edwards moved that the OIC approve a commitment of $125 million to Fortress Fund V, L.P. Said commitment is subject to thesatisfactory negotiation of the requisite legal documents by legal counselworking in concert with OST Staff and PCA. The motion was seconded by Harry Demorest and passed unanimously by the Council

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