Keefe Bruyette & Woods analyst Robert Lee has downgradedFortress Investment GroupLLC to "market perform" from "outperform,"saying the company's underlying growth remains constrained.

Fortress' underlying asset growth trajectory is expected tobe modest over the intermediate term compared to peers, Lee said. The company'sbalance sheet realizations are expected to contribute to cash distributions,which could remain healthy, and these distributions will be one-time events andnot expected to affect the stock, the analyst said.

Credit businesses have continued to perform well and shouldbe the main source of incentive generation for the company, but the liquidhedge fund and private equity businesses are in runoff mode. Permanent CapitalVehicles' fundraising potential is expected to remain heavily tied to thechallenging broader equity market conditions, Lee added.

The analyst lowered his price target on Fortress' stock to$5.50 from $6.50. He reduced his 2016 EPS estimate to 74 cents from 77 cents,and cut his 2017 EPS estimate to 72 cents from 77 cents.

Lee also downgraded Och-Ziff Capital Management Group LLC to "marketperform" from "outperform."

The analyst said other alternative managers offer superiorrisk/return given Och-Ziff's flat multi-strategy hedge fund performance,accelerating outflows and continued overhang of the Department of Justice'sinvestigation.

The analyst lowered his price target on the company's stockto $4.50 from $5.50. He reduced his 2016 EPS estimate to a loss of 1 cent fromearnings of 12 cents, and lowered his 2017 EPS estimate to 95 cents from $1.21.