Hedge Fund Ivaldi Shutters After Top Investor Leaves

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  • Money manager will close both its London and Singapore offices
  • Main fund said to have beaten peers last year with 13% return

Ivaldi Capital LLP, founded in 2009 by three former Citigroup Inc. prime brokers, is shutting down after its largest investor pulled out, according to a person with knowledge of the matter.

The hedge-fund manager led by Chief Investment Officer Will Potts will close both its London and Singapore offices, the person said, asking not to be identified because the information isn’t public. A spokeswoman declined to comment.

Ivaldi’s closure underscores the risks faced by hedge funds exposed to a single large investor and makes the firm the latest in a series of money managers to return capital to clients. While the number of hedge funds shutting operations declined last year, there were still 66 more shops closing than starting up, Eurekahedge data show.

“It’s always very dangerous to build a business around one big investor," said Dariush Aryeh, CIO of investment adviser Fundana SA’s fund-of-funds. “A well-diversified investor base is a must for a good hedge fund to last.”

Hedge-Fund Closures

More money pools shuttered than started last year

Source: Eurekahedge

Data as of Dec. 19, 2017

Ivaldi, which started with backing from an unidentified Swedish pension fund, managed about $3.5 billion at its peak in September 2014, the person with knowledge of the closure said. Citigroup owns a minority stake in the firm, the person said. A spokeswoman for the U.S. investment bank declined to comment.

The decision to shutter the hedge fund wasn’t performance-related, the person said. The firm, which employs about 28 people, returned 13 percent in its flagship money pool last year, they said, beating the 8 percent gain in the Eurekahedge hedge-fund index.

Bloomberg’s Nishant Kumar reports on the closure of the Ivaldi Capital Fund.

(Source: Bloomberg)

Ivaldi deployed a long-short strategy, and its closure may come as a surprise to some because peers wagering on both rising and falling share values last year posted their best annual gain since 2013. They also raised the most money of any hedge-fund strategy, according to eVestment.

— With assistance by Suzy Waite

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