Veteran hedge fund manager Guy Spier is returning capital and closing his Aquamarine Fund, pointing to both personal considerations and mounting structural challenges facing active equity managers, according to a report by Investing.com.

The Zurich-based investor, known for his value-oriented approach and long-standing association with Warren Buffett, said the traditional edge in fundamental stock selection has diminished as artificial intelligence accelerates the commoditisation of research.

Since inception in the late 1990s, Aquamarine generated strong long-term returns, significantly outperforming the S&P 500 over its lifetime. However, more recent performance has lagged the benchmark for an extended period, highlighting the growing difficulty of sustaining alpha through conventional methods.

Spier’s decision reflects wider industry trends, with capital continuing to migrate from active strategies into passive vehicles. The proliferation of data and advanced analytics tools has reduced informational asymmetries, making it harder for discretionary managers to uncover overlooked opportunities.

Value-focused investors have also faced headwinds from the dominance of mega-cap technology names, which have driven a significant share of market returns in recent years. Like many peers, Spier was initially underweight high-growth tech before later adding exposure to Alphabet Inc, though the shift came late in the cycle.

For hedge funds, the closure underscores a broader inflection point. While active management continues to deliver pockets of outperformance, the combination of AI-driven research, increased market efficiency and evolving investor preferences is reshaping the competitive landscape.

Spier indicated that while differentiated thinking remains valuable, the traditional, labour-intensive model of equity research is becoming less effective in an environment increasingly defined by automation and scale.