Home Finance Melvin Capital to Close Funds, Return Cash to Investors

Melvin Capital to Close Funds, Return Cash to Investors

by Enochadmin

Gabe Plotkin, founding father of Melvin Capital



Photograph:

Alex Flynn/Bloomberg Information

Melvin Capital plans to shut its funds and return the money to its buyers, capping a surprising reversal for a agency that misplaced large on the surge in meme shares within the early days of the pandemic.

In a letter to buyers 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 attempting time.”

Melvin had been, till final 12 months, one of many top-performing hedge funds within the business.

Its executives as just lately as final week had been soliciting purchasers for his or her ideas on what new charge preparations appeared truthful to them and to Melvin going ahead. Mr. Plotkin had beforehand tried to get rid of Melvin’s so-called high-water mark, a typical business association during which hedge funds don’t acquire efficiency charges till their purchasers are made complete from prior funding losses. The proposal met with resistance from lots of Melvin’s purchasers, and Mr. Plotkin withdrew that plan and apologized to buyers.

Write to Juliet Chung at juliet.chung@wsj.com

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