Fortress Investment Group is exiting its convex Asia strategy, the latest to divest control of a business amid the hedge fund industry’s biggest shakeout since the 2008 financial crisis.
City Financial Investment, based in London, has agreed to take over the Fortress Convex Asia Fund and its management team in Singapore in the second quarter, according to a Fortress letter to investors obtained by Bloomberg News that didn’t disclose the terms of the deal.
The move is part of a reorganization at Fortress, which includes a bigger focus on event-driven strategies, the letter said. Convex Asia, which managed about $184 million as of February, bets on elevated price swings in Asia and related markets. It had losses every calendar year since its 2012 inception, while gaining so far in 2016.
Fortress, with $70.5 billion under management, has been revamping its liquid markets business since last year after macro strategies disappointed in 2015 and some of its biggest hedge funds posted declines. In October, Fortress announced it was liquidating its flagship Fortress macro fund, run by Michael Novogratz. It folded the pool after almost two years of losses and after a spate of redemptions since 2007 had cut its assets by three-fourths to $1.8 billion. Stu Bohart, who oversaw the hedge fund unit, also left last year.
The decision to exit Convex Asia “is part of a larger strategic repositioning of the Fortress Liquid Markets business, including the closing of the Fortress Macro Fund and a more dedicated focus on the event-driven Fortress Centaurus Global Fund,” the letter said.
