Commodities fund Arbalet to close soon as investors flee: sources

Wed Sep 18, 2013 3:40pm EDT
 
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By Barani Krishnan

NEW YORK (Reuters) - Commodities hedge fund Arbalet Capital is set to close over the next month or two, just a year and a half since its launch, after sluggish returns sparked an investor exodus at the firm, people familiar with the matter said.

Run by 30-year-old Jennifer Fan, one of the youngest hedge fund managers and among the few women in the business, Arbalet had nearly $700 million of capital at the peak of its fund raising last year, and its launch in April was one of the biggest of 2012.

Now, assets under management at the New York-based hedge fund have trickled to below $200 million.

People familiar with the situation at Arbalet said the fund was stricken by the departure of a few big investors who controlled the bulk of its capital. They said the fund would likely shut down over the next month or two.

"Obviously the fund's performance hasn't been great, but the bigger reason it's winding down is that its existing investors cannot be left holding a very high stake or risk after the exit of the rest," said a person with knowledge of the matter. "Most investors have tight compliance requirements on risk."

Officials at Arbalet declined to comment.

The fund posted a loss of nearly 9 percent last year, and was down about 6 percent through the first half of 2013, according to industry sources familiar with the returns.

The average commodities trading fund on the closely-watched Newedge Commodity Trading Index lost 2 percent last year and has slipped 2.5 percent in the year through August.   Continued...