Prosiris’s Billion-Dollar Hedge Fund Plunges to $284 Million

  • Assets at Reza Ali’s main fund fell more than 70% since 2015
  • Credit fund posted 17% loss in first nine months of this year

Prosiris Capital Management’s main hedge fund has seen assets plunge by more than 70 percent this year as losses mounted at the credit firm run by Goldman Sachs Group Inc. alumnus Reza Ali.

The Prosiris Global Opportunities Fund oversaw $284 million as of Sept. 30, according to a performance summary seen by Bloomberg, compared with $999 million as of December 2015.

Investors yanked cash as the New York-based fund lagged behind its benchmark, falling 17 percent in the first nine months of the year, the documents show. It only made money in two of those months, and less than 1 percent each time. This year’s decline follows the fund’s 2.6 percent drop in 2015, when Prosiris oversaw $1.6 billion at one point.

The average fixed income asset-backed hedge fund gained 4.1 percent in the first 10 months of 2016 and rose 2.1 percent in 2015, according to data compiled by Hedge Fund Research Inc.

Reached by phone on Nov. 8, Ali directed requests for comment to external spokesman Chris Giglio, who didn’t respond to calls and an e-mail.

Lock-Up Period

Investors in Prosiris’s hedge fund were required to commit money to the fund for one year or face a 5 percent fee for early withdrawal, according to the documents. Earlier this year the firm told clients they would be limited to pulling only 20 percent of their capital in any quarter.

Hedge funds are losing assets as they post lackluster returns and face investor criticism for high fees. More than $51 billion was pulled from the industry in the first nine months of 2016, the most since the financial crisis, according to HFR.

The recent performance marks a reversal for the Prosiris fund, which surged more than 22 percent in 2012 amid a rebound in distressed commercial and residential mortgage-backed securities. Ali raised the bulk of his assets after that year, and the fund gained 16.4 percent in 2013 and 7 percent in 2014, the documents show.

Ali founded Prosiris in 2009 after three years as a proprietary trader at Goldman Sachs where he managed a multibillion-dollar credit portfolio that included derivatives. He started his hedge fund in 2011 after receiving between $50 million and $100 million from Investcorp.

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