New York (HedgeCo.net) – It has been a tough year for Fortress Investment Group and according to the Wall Street Journal, the struggling firm is liquidating part of its hedge fund business.

According to the report, Fortress is selling off investments made in other hedge funds through its Partners funds. Once a very successful aspect of Fortress’ business, the unit managed approximately $1.7 billion in 2010. The Journal article puts the current AUM as $400 million and that was according to people familiar with the matter.

The shrinking Partners unit isn’t the only area where Fortress is suffering either. The firm’s own flagship fund is down 15% year to date, the president of the hedge fund unit left and the co-manager of macro funds left earlier in the summer.
Fortress is one of a handful of publicly traded hedge fund management firms and the stock is paying the price for the company’s struggles. The stock is down over 25% on the year.

Rick Pendergraft
Research Analyst
HedgeCoVest