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Fortress Brookdale Investment Fund LLC – ‘N-30D/A’ for 12/31/02

On: Tuesday, 3/4/03, at 4:36pm ET · Effective: 3/4/03 · For: 12/31/02 · Accession #: 950123-3-2438 · File #: 811-10127

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/04/03  Fortress Brookdale Inv Fund LLC   N-30D/A    12/31/02    1:19K                                    RR Donnelley/FA

Amendment to Annual or Semi-Annual Report Mailed to Shareholders — Rule 30d-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-30D/A     Fortress Brookdale Investment Fund LLC                14     43K 

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FORTRESS BROOKDALE                                                              
INVESTMENT FUND LLC                                                             

Financial Statements for the Year Ended December 31, 2002 and                   
Report of Independent Auditors                                                  

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FORTRESS BROOKDALE INVESTMENT FUND LLC                                          

TABLE OF CONTENTS                                                               

                                                        [Enlarge/Download Table]

                                                                                 PAGE
                                                                                     
REPORT OF INDEPENDENT AUDITORS                                                      1

FINANCIAL STATEMENTS:                                                                

   Statement of Assets and Liabilities as of December 31, 2002                      2

   Schedule of Investments as of December 31, 2002                                  3

   Statement of Operations for the year ended December 31, 2002 and Financial        
   Highlights for the period ended December 31, 2000 and the years ended             
   December 31, 2002 and 2001                                                       4

   Statement of Cash Flows for the year ended December 31, 2002                     5

   Statements of Changes in Net Assets for the year ended December 31, 2002 and      
   December 31, 2001                                                                6

   Notes to Financial Statements                                                    7

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REPORT OF INDEPENDENT AUDITORS

To the Members and Trustees of                                                  
Fortress Brookdale Investment Fund LLC                                          

We have audited the accompanying statement of assets and liabilities of Fortress
Brookdale Investment Fund LLC (the "Company"), including the schedule of        
investments, as of December 31, 2002, and the related statements of operations  
and cash flows for the year then ended, the statements of changes in net assets 
for each of the two years in the period then ended, and the financial highlights
for each of the three years in the period then ended. These financial statements
and financial highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and       
financial highlights based on our audits.                                       

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and       
financial highlights are free of material misstatement. An audit includes       
examining, on a test basis, evidence supporting the amounts and disclosures in  
the financial statements. An audit also includes assessing the accounting       
principles used and significant estimates made by management, as well as        
evaluating the overall financial statement presentation. We believe that our    
audits provide a reasonable basis for our opinion.                              

In our opinion, the financial statements and financial highlights referred to   
above present fairly, in all material respects, the financial position of       
Fortress Brookdale Investment Fund LLC at December 31, 2002, the results of its 
operations and its cash flows for the year then ended, the changes in its net   
assets for each of the two years in the period then ended, and the financial    
highlights for each of the three years in the period then ended, in conformity  
with accounting principles generally accepted in the United States.             

                                     /s/ Ernst & Young LLP

February 28, 2003                                                               
New York, NY                                                                    

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FORTRESS BROOKDALE INVESTMENT FUND LLC                                          

STATEMENT OF ASSETS AND LIABILITIES                                             
(dollar amounts in thousands)                                                   

                                                                [Download Table]

                                                            December 31, 2002
                                                            -----------------
                                                                             
ASSETS                                                                       

   Investment in affiliate, at value (cost $14,694)               $ 16,768   
   Cash and cash equivalents                                           156   
   Other receivables                                                    52   
                                                                  --------   
                                                                    16,976   
                                                                  --------   
LIABILITIES                                                                  
   Accounts payable                                                     51   
                                                                  --------   
                                                                        51   
                                                                  --------   

NET ASSETS                                                        $ 16,925   
                                                                  ========   

NET ASSETS CONSISTS OF:                                                      
   Preferred equity                                               $     42   
   Members' interest                                                15,000   
   Accumulated net investment loss                                    (191)  
   Accumulated net unrealized gain on affiliate investment           2,074   
                                                                  --------   

                                                                  $ 16,925   
                                                                  ========   

See Notes to financial statements.                                              

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FORTRESS BROOKDALE INVESTMENT FUND LLC                                          

SCHEDULE OF INVESTMENTS                                                         
(dollar amounts in thousands)                                                   

                                                        [Enlarge/Download Table]

Investment                                         Description of Securities          Cost    Fair Value
----------                                         -------------------------         -------  ----------
                                                                                                        
Investment in controlled affiliate (a):                                                                 

  Fortress Brookdale Acquisition LLC, ("FBA") (b)  4.6% of the issued common shares  $14,694   $ 16,768 
                                                                                     =======   ======== 

(a)   The Company shares its investment advisor with Fortress Registered        
     Investment Trust, which owns 50.51% of FBA. FBA is therefore an affiliate
of the Company. These securities are restricted as to public resale.

(b)   FBA owns 1000 of the outstanding common shares of Brookdale Living        
    Communities, Inc., comprising 100% of its issued and outstanding equity,
as its sole asset at the end of the period.                         

Summary of Transactions with Affiliated Companies                               

                                                        [Enlarge/Download Table]

                                                            Cost                         Fair Value 
                                                          Incurred   Dividend, Interest   of Total  
Affiliate                           Purchase Date       This Period  and Realized Gains   Investment
---------                           -------------       -----------  ------------------  -----------
                                                                                                    
Fortress Brookdale Acquisition LLC  September 23, 2000   $       --      $       --       $  16,768 
                                                         ==========      ==========       ========= 

See notes to financial statements.                                              

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FORTRESS BROOKDALE INVESTMENT FUND LLC                                          

STATEMENT OF OPERATIONS AND FINANCIAL HIGHLIGHTS                                
(dollar amounts in thousands)                                                   

                                                                [Download Table]

                                                               Year Ended    
                                                            December 31, 2002
                                                            -----------------
                                                                             
Income                                                                       
   Interest                                                      $      1    
Expenses                                                                     
   Professional fees                                                   18    
   Directors fees                                                       8    
   Miscellaneous expenses                                               9    
                                                                 --------    
                                                                       35    
                                                                 --------    
Net investment loss                                                   (34)   
                                                                 --------    

Net unrealized gain on affiliate investment                         1,169    
                                                                 --------    

Net increase in net assets resulting from operations             $  1,135    
                                                                 ========    

FINANCIAL HIGHLIGHTS                                                            

                                                        [Enlarge/Download Table]

                                                      Year Ended December 31,                
                                                      -----------------------                
                                                                                 Period from 
                                                                               9/6/00 through
Disclosure of certain ratios                             2002        2001         12/31/00   
                                                      ---------   ---------    --------------
                                                                                             
Ratio of total expenses to average net assets             0.2%         0.2%           2.5%*  

Ratio of net investment income to average net assets     (0.2%)       (0.2)%         (2.5%)* 
Portfolio turnover rate                                   0.0%         0.0%           0.0%*  
Total return                                              7.0%         5.6%          (1.7%)  

*     annualized                                                                

See notes to financial statements.                                              

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FORTRESS BROOKDALE INVESTMENT FUND LLC                                          

STATEMENT OF CASH FLOWS                                                         
(dollar amounts in thousands)                                                   

                                                                [Download Table]

                                                                  Year Ended    
                                                               December 31, 2002
                                                               -----------------
                                                                                
CASH FLOWS FROM OPERATING ACTIVITIES:                                           
Net increase in net assets resulting from operations               $  1,135     
Adjustments to reconcile net increase in net assets resulting                   
  from operations to net cash used in operating activities:                     
    Net unrealized gain on affiliate investment                      (1,169)    
    Change in:                                                                  
      Accounts payable                                                    1     
                                                                   --------     
Net cash used in operating activities                                   (33)    
                                                                   --------     
CASH FLOWS FROM FINANCING ACTIVITIES:                                           
  Preferred dividends paid                                               (5)    
                                                                   --------     
Net cash used in financing activities                                    (5)    
                                                                   --------     
NET DECREASE IN CASH AND CASH EQUIVALENTS                               (38)    

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                          194     
                                                                   --------     
CASH AND CASH EQUIVALENTS, END OF PERIOD                           $    156     
                                                                   ========     

See notes to financial statements.                                              

5 

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FORTRESS BROOKDALE INVESTMENT FUND LLC                                          

STATEMENTS OF CHANGES IN NET ASSETS                                             
(dollar amounts in thousands)                                                   

                                                        [Enlarge/Download Table]

                                                                    Year Ended          Year Ended   
                                                                 December 31, 2002  December 31, 2001
                                                                 -----------------  -----------------
                                                                                                     
Increase (decrease) in net assets resulting from operations                                          
    Net investment loss                                               $    (34)          $    (31)   
    Net unrealized gain on affiliate investment                          1,169                867    
                                                                      --------           --------    

Net increase (decrease) in net assets resulting from operations          1,135                836    

Capital contributions                                                       --                 --    
Issuance of preferred interests                                             --                  2    
Distribution of preferred equity                                            (5)                (5)   
                                                                      --------           --------    

Net increase in net assets                                               1,130                833    
                                                                      --------           --------    

Net assets, beginning of period                                         15,795             14,962    
                                                                      --------           --------    

Net assets, end of period                                             $ 16,925           $ 15,795    
                                                                      ========           ========    

See notes to financial statements.                                              

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FORTRESS BROOKDALE INVESTMENT FUND LLC                                          

NOTES TO FINANCIAL STATEMENTS                                                   
DECEMBER 31, 2002                                                               

1.    ORGANIZATION                                                              

 Fortress Brookdale Investment Fund, LLC (the "Company") was formed on
     September 6, 2000 as a Delaware limited liability company and operates as
  a closed-end, non-diversified management registered investment company
     ("RIC") under the Investment Company Act of 1940 (the "Act"). The Company
     was formed primarily to invest in limited liability interests in Fortress
Brookdale Acquisitions LLC ("FBA"). FBA owns 100% of the issued and 
   outstanding common stock of Brookdale Living Communities Inc., a senior
living company.                                                     

 The members of the Company include Northwestern Mutual Life Insurance
 Company ("Northwestern"), Weyerhauser Company Master Retirement Trust
("Weyerhauser"), and FIG Advisors LLC ("FIG", and together with     
     Northwestern and Weyerhauser, the "Members"), with FIG acting as Advisory
    Member. The liability of each member is limited to the amount of capital
   contributions required to be made by such member in accordance with the
      provisions of the Company's operating agreement, as amended. The operating
agreement provides that, unless terminated earlier, the Company will
terminate on the first anniversary of the termination of FBA.       

  FIG is also the advisor of Fortress Registered Investment Trust, which
    holds 50.51% of FBA. As the Company and FBA share the same advisor, they
are considered affiliates for purposes herein.                      

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

    BASIS OF ACCOUNTING - The accompanying financial statements are prepared
     in accordance with accounting principles generally accepted in the United
   States ("GAAP"). The Company reports its assets and liabilities at fair
value on the reporting date, including its investment in FBA.       

    USE OF ESTIMATES - The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions that
    affect the reported amounts of assets and liabilities, the disclosure of
     contingent assets and liabilities at the date of the financial statements
  and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.           

   RISKS AND UNCERTAINTIES - In the normal course of business, the Company
    may encounter primarily market risk. Market risk reflects changes in the
  value of investments in securities due to changes in interest rates or
      other market factors, including the valuation of equity securities held by
the Company.                                                        

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FORTRESS BROOKDALE INVESTMENT FUND LLC                                          

NOTES TO FINANCIAL STATEMENTS                                                   
DECEMBER 31, 2002                                                               

VALUATION OF ASSETS AND LIABILITIES - The Company's investment in   
     affiliate is accounted for under the Act. The valuation of investments is
      initially based upon initial cost and is updated periodically by estimates
as determined in accordance with the Company's valuation policies as
approved by the Company's board of managers.                        

      Events that could change the reported amount include: further financing by
the investee company, pending disposition by the Company of its     
investment, obtaining a third party estimate of the value of its    
  investment, significant changes in the financial position or operating
  results of the investee company, and sales in recent public or private
transactions of the same or similar securities, among others.       

  Due to the inherent uncertainty of valuations of investments without a
     public market, the estimates of value may differ from the values that are
      ultimately realized by the Company, and the differences could be material.
   All other assets and liabilities are stated at cost, which approximates
fair value.                                                         

  FEDERAL INCOME TAXES - No income taxes have been provided for in these
financial statements as each Member is individually responsible for 
reporting income or loss based upon their respective share of the   
Company's income and expenses as reported for income tax purposes.  

   DISTRIBUTIONS TO MEMBERS - Distributions to members are recorded on the
      ex-dividend date. The character of distributions made during the reporting
   period from net investment income or net realized gains may differ from
  their ultimate characterization for federal income tax purposes due to
    book/tax differences in the character of income and expense recognition.
     Distributions are allocated first to the Advisory Member to the extent of
the allocation described in Note 3; second, to the preferred equity 
interests; and third, to Weyerhauser and Northwestern pro rata in   
    accordance with their respective capital accounts. No distributions have
been made to the Members through December 31, 2002.                 

SECURITY TRANSACTIONS AND REVENUE RECOGNITION - The Company follows 
  industry practice and records security transactions on the trade date.
Dividend income is recognized on the ex-dividend date.              

CASH AND CASH EQUIVALENTS - The Company considers all highly liquid 
    short-term investments with a maturity of 90 days or less when purchased
   to be cash equivalents. Certain amounts on deposit with major financial
institutions may, from time to time, exceed insured limits.         

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FORTRESS BROOKDALE INVESTMENT FUND LLC                                          

NOTES TO FINANCIAL STATEMENTS                                                   
DECEMBER 31, 2002                                                               

3.    ALLOCATIONS TO MEMBERS                                                    

     Net Profits, as defined, are first allocated to FIG in an amount equal to
a cumulative return of 1.5% per annum on all Capital Contributions. 
Remaining Net Profits are then allocated to holders of the preferred
   equity interest in accordance with its terms, then to the Members other
than FIG.                                                           

     Net Losses, as defined, are first allocated to the Members other than FIG
    or holders of the preferred equity interest until their capital accounts
    have a zero balance. Remaining Net Losses, are then allocated to holders
     of the preferred equity interest until their capital accounts have a zero
  balance then to the Members other than FIG or holders of the preferred
equity interest.                                                    

4.    PREFERRED EQUITY INTERESTS                                                

     The Company has issued preferred equity interests in the aggregate amount
of $52,500 to 105 qualified investors. Such securities receive a 10%
    return, payable out of the Company's Net Profits. Preferred dividends in
   the amount of $5,250 were paid during the year ended December 31, 2002.

9 

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FORTRESS BROOKDALE INVESTMENT FUND LLC                                          
Directors' Information (Unaudited) (CONT'D)                                     

                                                        [Enlarge/Download Table]
                                                                                                                                    
Name (age)                         Principal Occupation During Past 5 yrs.      Other Directorships                     No. of      
Position (held since)                                                                                                   Portfolios  
Address                                                                                                                 for which   
                                                                                                                        Board Member
                                                                                                                        Serves      
------------------------------------------------------------------------------------------------------------------------------------
Dennis Porterfield (66)                                                         -  Hackensack University Medical         One (1)    
                                    -  Executive Vice President of Summit          Center                                           
Member of the Board (December          Bancorp. (July 1994-July 1999)                                                               
 1999)                                                                                                                              

c/o Fortress                                                                                                                        
1251 Avenue of the Americas                                                                                                         
NY, NY 10020                                                                                                                        

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FORTRESS Brookdale Investment Fund LLC                                          
Officers' Information (Unaudited)                                               

                                                        [Enlarge/Download Table]

Name (age)                         Principal Occupation During Past 5 yrs.           
Position (held since)                                                                
Address                                                                              
--------------------------------------------------------------------------------     
                                                                                     
Wesley R. Edens (41)                 -   Chief Executive Officer of Fortress         
                                         Investment Group LLC (May 1998 to present)  
Chief Executive Officer                                                              
(November 1999)                      -   Managing Director of UBS Securities LLC     
                                         (May 1997 - May 1998)                       
c/o Fortress                                                                         
1251 Avenue of the Americas          -   Partner of BlackRock Financial Management,  
NY, NY 10020                             Inc. (October 1993 - May 1997)              

--------------------------------------------------------------------------------     
Robert I. Kauffman (39)              -   President of Fortress Investment Group LLC  
                                         (May 1998 to present)                       
President (November 1999)                                                            
                                     -   Managing Director of UBS Securities LLC     
c/o Fortress                             (May 1997 - May 1998)                       
1251 Avenue of the Americas                                                          
NY, NY 10020                         -   Principal of BlackRock Financial            
                                         Management, Inc. (April 1994 - May 1997)    
--------------------------------------------------------------------------------     
Randal A. Nardone (47)               -   Chief Operating Officer of Fortress         
                                         Investment Group LLC (May 1998 to present)  
Vice President, Chief Operating                                                      
Officer and Secretary (November      -   Managing Director of UBS Securities LLC     
1999)                                   (May 1997 - May 1998)                        

c/o Fortress                         -   Principal of BlackRock Financial            
1251 Avenue of the Americas              Management, Inc. (June 1995 - May 1997)     
NY, NY 10020                                                                         

--------------------------------------------------------------------------------     
Erik P. Nygaard (43)                 -   Chief Information Officer of Fortress       
                                         Investment Group LLC (May 1998 to present)  
Vice President and Chief                                                             
Information Officer (November        -   Managing Director of UBS Securities LLC     
1999)                                    (May 1997 - May 1998)                       

c/o Fortress                         -   Principal of BlackRock Financial            
1251 Avenue of the Americas              Management, Inc. (September 1994 - May 1997)
NY, NY 10020                                                                         

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FORTRESS Brookdale Investment Fund LLC                                          
Officers' Information (Unaudited) (cont'd)                                      

                                                        [Enlarge/Download Table]

Name (age)                          Principal Occupation During Past 5 yrs.                  
Position (held since)                                                                        
Address                                                                                      
---------------------------------------------------------------------------------------------
                                                                                             
Jeffrey R. Rosenthal (51)          -     Chief Financial Officer of Fortress                 
                                         Investment Group LLC (June 2002-Present)            

Chief Financial Officer                                                                      
(June 2002)                        -     Executive Vice President and Chief Operating        
                                         officer of Starwood Capital Group                   
                                         (April 1997 to June 2002)                           
c/o Fortress                                                                                 
1251 Avenue of the Americas        -     Chief Financial Officer of Reyes Holdings           
NY, NY 10020                             (February 1996 - April 1997)                        
---------------------------------------------------------------------------------------------
Lilly H. Donohue (31)              -     Vice President of Fortress Capital Finance          
                                         LLC (November 1999 - present)                       
Vice President and Assistant                                                                 
Secretary (November 1999)          -     Vice President of Fortress Investment Group         
                                         LLC (May 1998 - November 1999)                      
c/o Fortress                                                                                 
1251 Avenue of the Americas        -     Vice President of UBS Securities, LLC (May          
NY, NY 10020                             1997 - May 1998)                                    

                                   -     Vice President of BlackRock Financial               
                                         Management, Inc. (October 1992 - May 1997)          

17

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘N-30D/A’ Filing	Date	First	Last	Other Filings

Filed on / Effective on:	3/4/03			N-30D
	2/28/03	3
For Period End:	12/31/02	1	11	N-30D, NSAR-B
	12/31/01	2	8	N-30D, NSAR-B
	12/31/00	2		N-30D, NSAR-B
	9/23/00	5
	9/6/00	9
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Fortress Brookdale Investment Fund LLC – ‘N-30D/A’ for 12/31/02

On: Tuesday, 3/4/03, at 4:36pm ET · Effective: 3/4/03 · For: 12/31/02 · Accession #: 950123-3-2438 · File #: 811-10127

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Amendment to Annual or Semi-Annual Report Mailed to Shareholders — Rule 30d-1
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