Hedge Fund Astellon Returning Capital to Turn Family Office

(Bloomberg) -- Hedge fund Astellon Capital Partners will return investors' money and turn into a family office by the beginning of next year, the latest to succumb to an increasingly hostile market for money managers.

“The market environment for fundamental and value driven investing has become increasingly difficult over the past few years,” the London-based firm wrote in a letter to investors, a copy of which was seen by Bloomberg. A spokesman for the firm confirmed the decision, while declining to comment further.

The firm, led by Bernd Ondruch, managed as much as $700 million in 2016. Astellon focuses on event-driven strategies across Europe, with an emphasis on German-speaking countries, according to its website, which didn't provide the firm's latest assets under management.

This year's global turmoil has tripped up the $3 trillion hedge fund industry, erasing gains and leading to managers including Highfields Capital's Jon Jacobson and Tourbillon Capital's Jason Karp planning to exit the business.

Astellon Special Opportunities Fund, which started in 2011, lost 6.9 percent this year through October and previously had only one down year, which was in 2016, according to the letter. The fund had lowered managed fees last year to 1.25 percent from 2 percent.

“We are cognizant of the fact that the current environment would require us to accept risk which we cannot reconcile with our fundamental approach or fiduciary duties at this stage of the cycle," the firm wrote to investors. “The events of October only serve to substantiate our convictions."

To contact the reporter on this story: Nishant Kumar in London at nkumar173@bloomberg.net

To contact the editors responsible for this story: Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net, Josh Friedman

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