Aurora Investment Management will close and return money invested in its hedge fund-of-funds strategies after a failed attempt to sell the business.
Ted Meyer, a spokesman for Natixis Global Asset Management, Aurora’s parent company, confirmed the firm’s closure in an interview.
Hedge funds-of-funds manager 50 South Capital Advisors, a Northern Trust Asset Management subsidiary, announced March 2 that it would acquire Aurora but decided not to follow through with the deal on April 18 because the number of Aurora clients that agreed to the new ownership structure was below the minimum threshold set by the terms of the deal.
“After considering a range of strategic alternatives, we have determined the best course of action to ensure fair and equitable treatment for Aurora’s investors is to return their capital,” according to a statement from Natixis that Mr. Meyer provided.
Roxanne M. Martino, Aurora’s CEO, and Scott C. Schweighauser, president and portfolio manager, did not respond to e-mail requests for comment, but in a note to its clients obtained by Pensions & Investments, Aurora said: “It is our intention to begin returning investor capital as the investments in the portfolios become available.”
Mr. Meyer declined to comment on the terms of Aurora’s wind-down.
However, a source with knowledge of Aurora’s plans who requested anonymity said the firm expects to return between 80% and 85% of investor money by the end of 2016, with the balance likely to be returned by the end of 2018.
Mr. Meyer said a core group of Aurora employees will remain employed to handle the return of investor capital, but other employees will be terminated. He said the closure of Aurora will not have a negative impact on Natixis’ money management business.
Aurora’s note went on to say that “we started Aurora when our industry was in its formation and we are proud of the organization that we have built together over the past 28 years at Aurora. … Over the past several years as our industry has matured, industry trends combined with market conditions have made our business more challenging.”