Paul Tudor Jones is shaking up his hedge fund, which has been battered by investor withdrawals.
Tudor Investment Corp. is closing its Tudor Discretionary Macro Fund and letting investors shift assets to the main BVI fund as of Jan. 1, according to an investor letter seen by Bloomberg News. Mr. Jones will also principally manage Tudor's flagship BVI fund, which will be the firm's only multitrader fund next year, the Thursday letter said.
Andrew Bound and Aadarsh Malde, who were co-chief investment officers of the Tudor Discretionary Macro Fund, will be leaving by mutual agreement, the letter said. The fund, which lost 1.6% this year through Nov. 3, is made up of multiple managers not including Mr. Jones himself. Mr. Jones, who ran the BVI fund with a team of managers, will now have a smaller team and will assume a more dominant role in the fund.
"I will be the largest risk taker and will manage a notional capital account equal to the AUM of the Tudor BVI strategy itself," Mr. Jones said in the letter, referencing assets under management. "This means that my results will have a one-for-one performance impact on Tudor BVI. I relish this challenge."
Mr. Jones and other Tudor partners are the largest investors in the BVI fund, which is up 0.8% this year through Nov. 3, a separate investor document showed.
A spokesman for the firm declined to comment.
Years of central bank monetary easing has suppressed market volatility, hurting macro fund returns and spurring investor withdrawals. Clients pulled a net $500 million from Tudor in the third quarter, leaving the firm's assets at $7 billion, about half the level it managed in June 2015, Bloomberg News reported in October. Mr. Jones, who has been frustrated with the macro trading environment, said things are "on the verge of a significant change" and that the current market is reminiscent of the bubble of 1999.
"That was a year in which Tudor BVI's macro book was basically flat while U.S. equities experienced one of the greatest bubbles in history," Mr. Jones wrote. "The termination of that bull market kicked off a three-year macro feast." That storyline is much the same today, with bitcoin and fine art taking the place of the Nasdaq 100 of 1999, he wrote.
The low volatility market environment has been an "anathema" to traditional macro funds and is becoming a "dangerous place," lulling investors into a false sense of complacency, Mr. Jones wrote in a separate market note Thursday.