Achievement Asset Management, the Chicago hedge fund firm that was associated with Peak6 Investments until it broke away in September 2014, is returning its $875 million in hedge fund assets to investors.
The firm, launched by former O'Connor & Associates manager Joe Scoby in 2012, is returning assets to investors after negative returns in the mid-single digits this year, said Mr. Scoby, who leads the firm. His corporate bond strategy was particularly hard hit, he said.
“This is obviously not what we were aiming for and I just don't think my strategy makes a lot of sense in this market environment so I just decided to give everybody their money back and regroup,” Mr. Scoby said in an interview.
At its peak, Achievement's hedge fund had about $2 billion under management last year, but clients, including endowments, pension funds and funds of funds, had pulled money out this year as returns declined. Mr. Scoby expects to return most of the money by the end of the year.
His 50-employee firm will continue operating to implement the return of funds and he will determine what his strategic options are with respect to the company.
Most of the workers are in Chicago, but the firm also has an office in London. For now, he's keeping $100 million that he has under management in liquid alternatives, which are hedge fund-like investments on behalf of retail investors.
Mr. Scoby bought out Peak6 co-owners last year and renamed the hedge fund operation Achievement Asset Management.
He left open the possibility that he'll build something off the liquid alternatives business, perhaps acting as a subadviser to another hedge fund firm. “The first priority is managing the hedge fund correctly and getting customers their money back,” he said. “The second thing is, once that's well underway, to explore our strategic options.”