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The effects of the credit crunch and write-downs in private equity investments are now being felt globally. Japan's Nomura Holdings Inc. reported an unexpected $713 million first-quarter loss as a decreased valuation on its stake in hedge fund Fortress Investment Group LLC, coupled with capital set aside to cover potential exposure to bond insurers, wiped out profits at the bank.
The Japanese brokerage took a ¥21 billion ($194 million) write-down
on its 15% stake in Fortress. Nomura had shelled out $888 million for
the stake in the New York-based hedge fund in 2006. The company also
wrote down $346.3 million on its private equity investments in Japan as
valuations fell, while setting $586 million for
potential costs related to bond insurers. - George White
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