Quant Hedge Fund Acrospire Shuts Down After Clients Pull MoneyBy
Hedge fund had $350 million at peak before poor performance
A string of prominent hedge funds have closed this year
Another hedge fund is calling it quits.
Acrospire Investment Management, which uses machine learning to wager on and against stocks globally, is shuttering and returning its capital to clients, according to a Sept. 29 email to investors seen by Bloomberg News. The Chicago-based quant firm, which ran $350 million at its peak, saw assets sink by about two-thirds as investors asked for their money back following the fund’s poor 2015 and 2016 performance.
“This decision was a disappointment to everyone at Acrospire amidst good performance in 2017," Chief Investment Officer Boris Krupa said in the email. “Ultimately the fund’s declining assets made it too challenging to continue.”
Acrospire joins a growing list of hedge funds that have thrown in the towel this year, including Eric Mindich’s Eton Park, Hugh Hendry’s Eclectica Fund and Whitney Tilson’s Kase Capital Management.
Quant funds have struggled in the first nine months of this year amid low volatility. They’ve gained just 0.6 percent, according to Hedge Fund Research.
The Acrospire Global Strategy started trading in 2011 with $15 million as a proprietary trading group under Rotella Capital Management. It had a hot two years, gaining 13 percent in 2012 and 29 percent the next year. In Jan 2016, the unit spun out to become its own firm, trading the same strategy.
Acrospire’s strategy fell 1.8 percent in 2016 after rising just 0.8 percent the previous year, according to an investor letter seen by Bloomberg. In 2015 the fund had “growing pains due to rapid growth” of assets, Krupa, who has a Ph.D. in brain and cognitive sciences from MIT, wrote in the email. "The models ran into several headwinds with higher market impact, trading costs and scarcer inventory of shares available for shorting.”
A spokesman for the firm declined to comment.
The firm had $119 million under management in August and expects to return all assets by the end of the year.