Fortress Investment Group recently became the first company to build and operate a private passenger train in the United States in over a century. Dubbed Brightline, the high-speed commuter train has already started operation connecting Fort Lauderdale and Miami though West Palm Beach. Its success is gaining traction and interest from global investors like Virgin Airline’s Richard Branson who recently invested in the train service. But what is his role here and how do either party benefit from this deal? Read more on crunchbase.com
About the investment
According to the Fortress Investment group management, Richard Branson injected a significant amount of capital into the expansion of the high-speed train networks. In addition to the capital contribution, Richard is also expected to share naming rights with the Fortress passenger train investment. Going forward, the passenger train that is currently referred to as the Brightline will change the name to Virgin Trains USA.
The move is aimed at capitalizing on the rich Virgin Group brand. Fortress investment group principals maintain that the company still has control of the train system and the change of name is n more than a marketing strategy where they hope to take advantage of Virgin Groups marketing strategies to improve the brand’s operational efficiency.
Need for external investment
Partnering with such a formidable and globally acclaimed brand as Virgin Group goes a long way in helping popularize Brightline. More importantly, the Fortress investment group management believes that Branson’s investment and the goodwill it attracts will go a long way in helping speed up their plan of expanding the railroad service. They particularly hope to stretch it towards such other cities as Dallas, Atlanta, and Houston.
More about Fortress investment
Fortress investment group’s success peaked in 2007 when they became the first private equity firm in the country to trade shares publicly. It would, however, pull these shares off the market a decade later after the management accepted a buyout proposal by Japan-based investor Softbank. Fortress group became a perfect acquisition candidate as its highly diversified investment base falls in line with Softbank’s ambitious plan of becoming the largest alternative investment company in the world.