In recent investing news, a credit facility took place between iPass and Fortress Investment Group. Fortress is one of the top diversified global investment management companies, and it currently manages about $40.9 billion in assets. It has about 1,750 private and institutional clients around the world. iPass is a mobile connectivity provider. Its Wi-Fi service is secure, constantly available and accessible on any device with a SaaS platform. Currently, iPass is responsible for about 64 million hot spots around the world. This makes it the globe’s largest Wi-Fi provider. The credit facility between the two companies was finalized with a value of up to $20 million from affiliate-managed funds.
Benefits Of The New Partnership
For Fortress Investment Group, the investment relationship is a benefit because of the great potential of iPass. In a 2016 article about iPass, a senior editor of an online publication pointed out that the company showed the ability to disrupt the mobile industry. The company does not offer service directly to consumers but rather to mobile connectivity providers. Although it has been around for about two decades, many consumers are still not familiar with its name. The company struggled for a while but made somewhat of a comeback in 2015 after it elected new leadership and made three innovative changes. These included the addition of open service plans with unlimited data, several strategic company partnerships and SmartConnect development tool kits. The innovations put the company in a higher position of leadership.
In the past, investors often looked only at a company’s profitability and financial health to determine if it would be a good investment. After investors saw what happened to Amazon over time, they started to consider a company’s innovative potential as a critical factor. With Amazon, the company did not appear profitable for the first several years. However, people who invested in the online giant anyway are now wealthy because of its success, which is tied to its perpetual growth from multiple disruptive innovations. Fortress Investment Group saw great potential with iPass because of its multiple innovations, and the investment management company looked beyond the financial health of iPass. The struggling financial state of iPass will be relieved with the new partnership, and that is a welcome change to the mobile connectivity provider.
In the fourth quarter of 2017, iPass held a meeting to discuss its profitability issues. CEO Gary Griffiths said that the company’s reselling of such a vital commodity fed a growing demand over time. The company did well and sold a service that depended only on its own software.
However, he pointed out that the company was feeling the erosion of Wi-Fi pricing around the world during the past several years. This created a predicament for iPass because its leaders wanted to expand its market and improve the software platform. The company wanted to show clients that its service was not only about reselling Wi-Fi but also about making smarter connection choices. As Mr. Griffiths pointed out in his speech, improving the SmartConnect software will require massive data collection and more in-depth analyses of that data. The data is essential for improving the network and the user experience. However, that requires a significant influx of cash. The new partnership with Fortress will open more doors financially for iPass, which means that it can meet its data goals. Also, it will be able to expand its market despite the changes in Wi-Fi pricing.
Why The Business Model Of Fortress Investment Group Will Help
With its headquarters in New York, Fortress Investment Group was founded in 1998. The company has partnered with many other well-known entities in the past and has maintained an excellent track record. Fortress Investment Group boasts a world-class investment platform, a devoted leadership team and a strong commitment to success. Its leadership team members take pride in helping other entities expand into new markets and realize their capabilities. According to an internal quarterly report from 2017, the company’s business model is highly diversified. The Fortress managers believe that this is why the company is so successful and can continually reap the benefits of its partners’ profits. Its investment strategies include private equity, credit, real estate and capital investment.
Fortress Investment Group has a strong and strategically developed business model that creates predictable and stable management fees, and most of the company’s alternative AUM is in long-term investments. Additionally, a considerable amount of variable incentive income is generated by the company’s alternative investment businesses. With this benefit, Fortress sees more meaningful financial results. Another important component of the company’s business model is balance sheet investments, which comprise a substantial portion of the company’s value. These investments are made alongside limited partners. When the success and strong financial health of Fortress are combined with its focus on diversification and innovation, it is easy to see why the company’s business model is a good fit for helping iPass succeed. With performance as its cornerstone, Fortress works hard to perpetually provide strong risk-adjusted returns for its investors. Today, it has more than 930 asset management employees, and more than 200 of those individuals are investment professionals.
Both Fortress Investment Group and iPass are excited about the new partnership. In a recent press release statement, Mr. Griffiths called Fortress a highly regarded institution and expressed his gratitude for the partnership opportunity. He said that his company’s balance sheet will improve with financing from Fortress, which will give iPass the chance to focus more on increasing its revenue and closing the gap on profitability. He also pointed out the implied strength of the iPass SmartConnect program since iPass used its software patents as security for the deal. Both companies are excited about watching the iPass market expand and are also hoping to help more families around the world enjoy better mobile connectivity.