A high-profile hedge fund figure has shut a $7 billion fund at a time when the industry as a whole is contending with moderate performance.

One of the most prominent of US-based hedge fund investors, Eric Mindich, is reportedly closing his $7 billion hedge fund, Eton Park Capital Management LP, according to the Wall Street Journal.

Family Wealth Report has contacted the firm seeking further comment and clarification.

Mindich, a former partner at Goldman Sachs, started his fund in 2004. At the time, the firm’s $3.5 billion launch was one of the largest in history, serving as an early sign of surging interest in those investment vehicles, the publication said. More recently, however, the fund has hit headwinds at a time when the broader hedge fund sector has logged modest returns, with liquidations reaching the highest level since 2008, as reported here recently (click here). 

Eton Park lost more than 9 per cent last year, investors say, even as the S&P 500 posted a return of nearly 12 per cent, including dividends. So far in 2017, Eton Park is flat, while the S&P is up over 5 per cent, the WSJ continued. Among the reasons for the recent poor performance: money-losing trades in Japanese stocks. The firm also lost money when Pfizer Inc. and Allergan terminated their planned $150 billion merger last April, though overall it made money from mergers during the year, the WSJ added, citing unnamed sources.

Eton Park received about $400 million of withdrawal requests from investors for the first quarter, while others pressed for lower fees, the report added.

As FWR has been told, wealth management clients have been pushing for cuts to hedge funds’ traditional mix of a 2 per cent annual management fee and a 20 per cent performance haircut. It is argued that in all too many cases, hedge funds offer few genuine opportunities for diversification and often merely use leverage to boost returns from the “Beta” of a market.