It was ingenious and audacious, and officials at the Internal Revenue Service were upset.
In November 2006 Fortress Investment Group filed its first documents with the Securities and Exchange Commission (SEC) in advance of going public. Fortress is a fabulously profitable investment vehicle that is part hedge fund and part private equity firm, with roughly $43bn (£20bn) in assets under management. Most major companies cleverly structure transactions to reduce taxes, but Fortress’ efforts – crafted by Skadden Arps Slate Meagher & Flom – were Olympian. Through a dazzlingly complex structure, it managed to avoid nearly all corporate tax and steer clear of SEC scrutiny of its investments.
