SBJ/February 6 - 12, 2006/Other News
Tilliss departs Fortress after 6 months
Published February 6, 2006
Veteran sports banker Robert Tilliss has left Fortress Investments after only a six-month stay at the emerging player in sports finance.
Fortress, which has more than $15 billion in assets, formed a division last fall, Sports Castle, staffed in part by Tilliss’ former company, Inner Circle Sports. But the firm also hired Greg Clark, the ex-head of Fleet Financial Group’s sports lending practice, in September, a few months after Tilliss arrived.
Whether that meant one too many cooks in the kitchen is unclear. But last month Tilliss departed, though he still consults on a handful of projects.
Sources close to Fortress declined to describe why Tilliss left, but emphasized that sports was still a strong focus of the hedge fund. However, the group also will look at lending to leisure and lifestyle companies such as spas, in addition to pro sports.
Fortress’ entry into sports several years ago marked a notable turn in the sector. The sports finance world to that point had been, by and large, dominated by a handful of traditional banks.
Fortress is a hedge fund and looks to lend money at high rates to risky projects. Fortress lent money to Frank McCourt as part of his debt-laden acquisition of the Los Angeles Dodgers two years ago, and most recently to New Jersey Nets owner Bruce Ratner at a rate more than 10 percent.
The sources said Fortress had considered creating a specialty sports lending fund, but instead chose to finance sports out of its existing Drawbridge fund.
Tilliss did not respond to a request for comment placed through one of his former Inner Circle employees, who did not want to give out Tilliss’ e-mail address or phone number. Fortress declined to comment.
It will be interesting to see if Fortress can find enough high-risk deals in pro sports to justify its interest. Because only a handful of sports teams have declared bankruptcy (meaning there is not a great deal of risk in lending to pro franchises), the kind of rates that Fortress charges are uncommon. That may be why Fortress decided against creating a specialty fund for sports, and why it has expanded its focus to recreation and leisure.