The net loss attributable to Class A shareholders was $44.6 million, or 41 cents per share, in the second quarter, compared with a loss of $55.6 million, or 67 cents per share, a year earlier.
Fund management distributable earnings fell 29 percent to $53 million.
Like other hedge fund firms, Fortress was hit hard during the financial crisis as many investors tried to withdraw their money. At the end of the quarter the company managed $31 billion in assets, down from $34.9 billion a year earlier.
Fortress, which put some restrictions on investor redemptions, said clients withdrew $736 million in the second quarter, compared with $311 million a year earlier.
Many hedge fund firms have prevented clients from pulling out all the money they wanted in recent months for fear that assets would drop too quickly and managers would be forced to sell off illiquid positions, further unnerving fragile markets.
New York-based Fortress, which went public in February 2007, said a 28 percent drop in management fees and a 62 percent plunge in incentive income, a fee paid mainly to hedge fund managers, weighed on second-quarter revenue, which fell to $139.1 million from $188.1 million.
Analysts had expected even lower revenue of $108 million, and earnings of 7 cents a share, according to Reuters Estimates.
Fortress did not pay a dividend in order to preserve cash.
The company recently named Daniel Mudd as its chief executive, allowing Fortress founder Wes Edens to focus more on portfolio management.
The company’s shares, which debuted at $18.50 and topped $35 in their first day of trading, closed at $4.30 on Tuesday.
(Reporting by Svea Herbst-Bayliss; editing by John Wallace)