Mark Brostowski, one of two money managers who oversaw investments for Regiment Capital Advisors, plans to step down from his role as the firm closes its credit hedge fund.
Brostowski, who helped run the fund, anticipates leaving at the end of this year, according to a letter to investors. The Boston-based firm, led by Thomas Sorbo on the non-investment side, also told investors that Brooke Carroll, a partner and collateralized loan obligation structurer and performance analyst, is departing June 30.
Regiment said today it’s closing the credit fund after losses last year tied to the slump in oil prices. Brostowski led the investing side of the business with William Heffron after founder Tim Peterson stepped back last year from day-to-day management.
Shuttering the hedge fund leaves it with a CLO business and a separate account from a sovereign wealth fund. Former Chief Financial Officer Christopher Quinn left this year to join Grove Street Advisors, according to that firm’s website.
“Regiment Capital Advisors recently informed our clients that we would be winding down Regiment Capital Ltd., our long/short credit hedge fund,” the firm said in an e-mailed statement. “We believe this decision is in the best interest of our fund shareholders and we are currently focused on proceeding in a manner that maximizes value for them.”
Regiment, started in 1999 by Peterson with four other professionals from Harvard Management Co., specializes in high-yield debt. Its main fund declined 8.8 percent in 2014 as plunging oil prices hurt its investments in energy and transportation companies.
Junk bonds tied to energy companies have returned 6.5 percent this year after dropping 7.4 percent in 2014.
“We anticipate some changes in the staffing of the firm in connection with the fund wind down,” the firm said. “We can assure you that our investment and operations staff remain committed to achieving all of our clients’ investment objectives.”
Hedge funds have been closing their doors or returning outside money at a rapid clip as returns have trailed the industry’s historical averages. In 2014, 864 hedge funds shut, according to data provider Hedge Fund Research Inc., the third straight year the number of closures surpassed 800.