Fortress Investment Group (NYSE:FIG) shares opened at $35, up 86%, in their debut on the New York Stock Exchange. The IPO marks the first hedge fund to go public and could mark the start of a new trend as hedge funds look for ways to attract more and more capital. Fortress's IPO priced at $18.50 a share late Thursday, at the top end of a previously disclosed range of $16.50 to $18.50. The IPO offering raised $634 million for Fortress.

According to the fund's S-1 filing with the SEC:

Fortress is a leading global alternative asset manager with approximately $29.9 billion in assets under management as of September 30, 2006. We raise, invest and manage private equity funds, hedge funds and publicly traded alternative investment vehicles. We earn management fees based on the size of our funds, incentive income based on the performance of our funds, and investment income from our principal investments in those funds. We believe our funds have produced consistently superior investment returns. We intend to grow our existing businesses, while continuing to create innovative products to meet the increasing demand of sophisticated investors for superior risk-adjusted investment returns.

Fortress will be the first global alternative asset manager listed on the New York Stock Exchange (NYSE: FIG). Fortress Operating Group will continue to own all of the businesses created by Fortress since 1998. We believe this offering is a unique opportunity to become aligned with our principals: Wesley Edens, Peter Briger, Robert Kauffman, Randal Nardone and Michael Novogratz. Our principals’ investing success has enabled us to grow rapidly while diversifying our management fee and incentive income streams. Our net income grew from $40.3 million for 2003 to $192.7 million for 2005, a 119% compounded annual growth rate ... We have grown our assets under management significantly, from approximately $1.2 billion as of December 31, 2001 to approximately $29.9 billion as of September 30, 2006, or a 96.8% compounded annual growth rate.

These are clearly impressive growth rates that warrant a close look at the stock. Given that this is the first hedge fund to ever IPO, the stock may experience volatility as investment professionals struggle to find a proper valuation. Meanwhile, this is definitely a stock to keep a close eye on!