Pine River Capital Management is closing its master fund after a wave of client withdrawals that would bring assets below $300 million, according to people with knowledge of the matter.
The fund, which started in 2002, had about $1 billion in assets prior to the latest redemption schedule. Because the withdrawals would cause the portion of illiquid assets to increase relative to the overall fund, the managers discussed placing those investments in a segregated account called a side pocket, said the people, who asked not to be named because the matter is private. Investors approved of that plan but the firm's managers ultimately decided instead to close.
A spokesman for Pine River declined to comment.
The multistrategy master fund has suffered from years of lackluster performance against a backdrop of rising investor discontent with hedge funds' high fees. The fund gained 1.7% this year through August, after gaining less than 1% in 2016 and dropping 2.75% the year prior, according to investor documents.
The decision marks another turn for Pine River, which has closed a handful of funds and seen staff departures over the last year or so. In June 2016, Pine River announced the closure of its $1.6 billion fixed-income fund, after one of its co-managers said he'd step back from active money management. Pine River is also liquidating its $560 million China hedge fund and ending long/short equity trading amid a shift toward event-driven strategies, Bloomberg reported in June and July. Additionally, the firm's money manager Renos Dimitriou is planning on spinning out his $1.7 billion government bond-trading fund into a stand-alone company.
Pine River, whose mortgage bond bets after the global financial crisis helped fuel its assets under management, still oversees $1.5 billion in customized accounts and $4.1 billion across two real estate investment trusts, according to one of the people. That's a fall from $15 billion in assets under management in 2015.
Also, on Tuesday, hedge fund manager David Stemerman said he is closing his Conatus Capital Management after a decade to explore a run as the Republican candidate for governor of Connecticut.
"As Conatus approaches the end of its 10th year, I have decided to pursue an opportunity in public service and will be winding down the firm in December," he wrote in a letter to investors.
Conatus, which now manages $1.6 billion, was the biggest startup of 2008, when Mr. Stemerman raised $2.3 billion. Since inception through last month, his annualized return was 5.4%. His flagship fund has returned 18% this year, while his media disruption fund, which he started in April, climbed 24%.
The manager said he will back a fund run by Amir Mokari, his consumer sector head. Mr. Stemerman will invest most of the money he now has in Conatus in the new firm and also take a passive stake. Mr. Mokari's firm will invest in consumer, technology, media and telecommunications stocks and is expected to open in January.
Conatus will return 95% of client money by Dec. 22, with the balance coming after a final audit.