Melvin Capital plans to shut its funds and return the money to its traders, capping a shocking reversal for a agency that misplaced massive on the surge in meme shares within the early days of the pandemic.
In a letter to traders that was reviewed by The Wall Avenue Journal, Gabe Plotkin, Melvin’s founder, disclosed the winding down of the funds, saying, “The previous 17 months has been an extremely making an attempt time.”
Melvin had been, till final yr, one of many top-performing hedge funds within the trade.
Its executives as not too long ago as final week had been soliciting shoppers for his or her ideas on what new price preparations appeared truthful to them and to Melvin going ahead. Mr. Plotkin had beforehand tried to cast off Melvin’s so-called high-water mark, a normal trade association through which hedge funds don’t acquire efficiency charges till their shoppers are made complete from prior funding losses. The proposal met with resistance from lots of Melvin’s shoppers, and Mr. Plotkin withdrew that plan and apologized to traders.
https://www.wsj.com/articles/melvin-capital-to-close-funds-return-cash-to-investors-11652910350
