I remember when Fortress Investment Group (NYSE: FIG) became the first hedge fund manager to take its shares public in February 2007. Demand was strong for an IPO hailed as historic, and the stock opened at $35 a share, nearly double the offering’s price.

A new era was in fact dawning, but not the one Fortress investors were expecting. The same day its IPO priced, HSBC warned of mounting losses from U.S. mortgages labeled subprime – which was not yet a household word.

By the Christmas of 2008 Fortress’ share price was down to 95 cents, and you could say no one gave a FIG any more.

Fast forward another seven years and Fortress is thriving once again. It’s got $72 billion of assets under management and earning fees, enough to have a trailing 11% dividend yield those IPO buyers from 2007 could only dream about.

The share price has quintupled off that 2008 low, though it’s down 37% since May 4.

The decline has been only somewhat more drastic than those suffered by other financial partnerships, including portfolio recommendations Blackstone Group (NYSE: BX) and KKR (NYSE: KKR).

There’s been a shakeout in the high-yield credit market this summer as investors fret the Federal Reserve long-awaited first rate hike since the financial crisis. The stock market has also been stressed of late.

But with the job market only just recovering its Great Recession losses and housing construction very early in its own comeback, this is likely not 2007 all over again despite some superficial similarities. And that means Fortress and the other asset manager partnerships should bounce back in time, helped by generous dividends and strong public market valuations of the assets in their portfolios.

Source: company presentation

As is, Fortress is trading at less than twice the value of its cash and investments net of debt, which stood at $2.87 per share at the end of the second quarter. At a current market cap of $2.4 billion, it’s probably not getting full credit for the $1 billion of performance incentives embedded in its funds but not yet realized, or the $10 billion of investors’ money it hasn’t yet deployed.

The share price has likely been weighed down by the poor recent performance of the company’s flagship Macro Fund, which seeks to capitalize on broad global economic trends. It was down 9.5% for the year through July, leading to a management shakeup.

This is not likely to destroy a franchise best known for its expertise in credit, and in fact some Fortress   funds in that area have continued to outperform.

The partnership manages $14.5 billion in credit hedge funds, and $16.5 billion in private equity assets, vs just $2.5 billion in macro funds. All of these assets provide management fees of 1-2% along with performance incentives of 10-25%. The other half or so of the assets under management sits in “traditional” fixed-income funds earning an average fee of just 0.2%.

Included in the private equity assets are “permanent capital vehicles” — separate companies managed by Fortress representatives – including the New Residential Investments (NYSE: NRZ) mortgage real estate investment trust, other REITS specializing in commercial real estate and health care, and a Florida railroad.

Fortress-managed funds also hold majority stakes in the big mortgage servicer Nationstar Mortgage Holdings (NYSE: NSM) and Springleaf Holdings (NYSE: LEAF), a subprime consumer lender.

Selling more of these to public investors is a lynchpin in Fortress’ stated “intent to unlock and distribute underappreciated value through balance sheet monetizations and distributions.”

The company has been paying a regular quarterly dividend of 8 cents a share this year and also paid out a special 30-cent dividend in March. Its distributions are reported on form K-1.

We’re taking advantage of the recent discounting by adding Fortress to the Aggressive Portfolio. Buy FIG below $6.50.