(Bloomberg) -- While much of the hedge funds industry is hemorrhaging cash, some firms are facing a problem of plenty in a year shaping up to be one of their best in at least a decade.
Ilex Capital Partners, one of last year’s biggest hedge fund startups that was in the market to raise an additional $1.5 billion by the end of this year, gathered the sum on Oct. 1 and closed to new capital the same day, according to a person with knowledge of the matter. Led by former Citadel traders Jonas Diedrich and Dave Sutton, the London-based firm now runs $4.1 billion, the person said, asking not to be identified because the details are private.
Distressed and special situations fund Shiprock Capital Management — launched in January last year with $80 million — is preparing to cap its assets at $1 billion and shut out new money early next year, according to another person. Based on expected inflows and capacity agreements with clients, Shiprock has decided to stop taking additional subscriptions from January, it said in an investor letter seen by Bloomberg News.
Shiprock’s hedge fund gained 31% this year through October following a 32% return in 2023, the investor letter showed. Ilex’s equity long/short, market-neutral and factor-constrained strategy gained 15.3% through October, the person said. The numbers compare with the 8.4% returned this year by an average hedge fund tracked by PivotalPath.
Investors are finding it harder to access hedge funds that deliver relatively higher returns, while money managers seek to balance the assets they oversee and their ability to maintain profits. Many multistrategy hedge funds have limited the amount of money they take in, while giants such as Millennium Management and Citadel have returned billions of dollars to clients over the past few years.
Similar Moves
There are others that have made similar moves. Earlier, Kite Lake Capital Management closed its flagship KL Special Opportunities Fund on Oct. 1 at $1.65 billion, boosting firm-wide assets to $2.2 billion, according to another person. Martin Beck’s $650 million Astaris Special Situations Master Fund, which counts investors including Blackstone Inc., is also preparing to close to new cash once assets reach €1 billion ($1.1 billion), Bloomberg News reported in September.
“There is a right level for us to be at in terms of our assets in order to both continue to deliver strong returns and to trade the big names in our space,” Shiprock’s Chief Investment Officer Andrey Pavlichenkov, said in a statement without providing details. “We think this is the right point for us now.”
Pavlichenkov, who was born in Russia and is now a British citizen, was previously a senior portfolio manager for emerging-markets distressed debt at VR Capital Group. Prior to that, he was an analyst at Credit Agricole SA in Moscow. His co-founder at Shiprock is Simon Milledge, who spent 11 years at GML Capital, a hedge fund specializing in emerging-markets distressed, special situation and high-yield credit.
Representatives for Ilex, Shiprock and Kite Lake declined to comment.
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