Fortress Investment Group LLC, a Manhattan-based alternative management firm, launched a public offering for RailAmerica, Inc., in an effort to pay down the portfolio company’s growing debt.

Owned by Fortress Investment Group’s private equity unit, RailAmerica operates short line and regional freight railroads in North America. The company is selling 10.5 million primary shares and 11.5 million secondary shares through RR Acquisition Holding LLC, priced at $15 per share.

Fortress bought RailAmerica in February 2007 and will own about 55.8% of the company after the close of the public offering. J.P. Morgan Securities Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Morgan Stanley & Co. Incorporated served as representatives for the underwriters.

The Jacksonville, Florida-based railroad operator transports coal, lumber and forest products, in addition to chemicals, and agricultural products. RailAmerica earned $206.4 million in revenue during the first six months of 2009, a decrease of 19 percent from the same period in 2008.

In Q2 2008, Fortress experienced $45 million in GAAP net losses. In July, Daniel H. Mudd, a Fortress board member, became chief executive of the investment firm. Fortress manages about $31 billion in assets.

RailAmerica filed for the IPO in late July. As of midday Tuesday, the railroad company's shares traded at $14.52. Calls placed to Fortress were not returned by press time.