September 9, 2009 / 3:40 PM / 10 years ago

UPDATE 2-Fortress shares soar after Barclays upgrade

(Recasts; adds detail, share movement)

Sept 9 (Reuters) - Fortress Investment Group LLC FIG.N shares rose as much as 16 percent after Barclays Capital upgraded the stock to “overweight” from “equal weight.”

Analyst Roger Freeman also raised his price target on Fortress stock to $9 from $3.

“We prefer Fortress Investment to Blackstone (BX.N) because of a significant valuation discrepancy between the two, despite Blackstone being the highest quality name in our view,” Freeman said

Freeman upgraded shares of private equity firm Blackstone Group to “equal weight” from “underweight.”

Fortress shares were trading up 14 percent at $5.08 in morning trade on the New York Stock Exchange, while Blackstone’s shares were up 3 percent at $13.05.

The brokerage also initiated coverage on Franklin Resources Inc (BEN.N) with an “overweight” rating, and upgraded Invesco Ltd (IVZ.N) to “overweight,” and said the companies are among the most geographically diverse asset managers, leveraged to growth across equities and bonds globally.

The brokerage said for the two companies, it expected stronger industry inflows, strong managements with proven track records integrating businesses, and balance sheet flexibility to pursue strategic priorities.

“We believe BEN has the ability to capture cross border flows, as well as flows within individual countries given its presence in local home markets,” analyst Roger Freeman said in a note to clients.

The brokerage also started coverage on Federated Investors Inc (FII.N), Eaton Vance Corp (EV.N) and Waddell & Reed Financial Inc (WDR.N) with “equal weight” rating on all the three stocks.

“We view Federated Investors as a consolidator in the money market space, having achieved economies of scale that puts the firm at the top of its peers,” Freeman said, adding “we believe Federated Investors will be able to grow market share as subscale players exit the business.”

Barclays also upgraded shares of hedge fund Och Ziff Capital Management Group (OZM.N) to “overweight” from “equal weight.”

For related alerts, double-click [ID:nWNAB7575] . (Reporting by Brenton Cordeiro in Bangalore; Editing by Gopakumar Warrier, Ratul Ray Chaudhuri)

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