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Bloomberg L.P.

Fortress and the curse of hedge-fund IPOs

Put another nail in the coffin of the hedge- fund-as-public-company business model. Fortress Investment Group plans to close down its macro fund run by Michael Novogratz, according to a Bloomberg News report citing a person with knowledge of the firm. It's shuttering the fund after two years of losses, including a 17.5 percent swoon this year through September. Fortress, which is also in the private-equity business, and hedge-fund manager Och-Ziff Capital Management Group went public in 2007. The fashionable opinion among the skeptical set then was that their enthusiasm to sell equity was clearly a sign of an impending market top. This view proved to be not only fashionable but...