London-based Nevsky Capital is closing its USD1.5 billion hedge fund, citing the rise of algo trading and bear market fears as reasons for the closure. The Nevsky fund is expected to liquidate its portfolio and move into cash by the end of this month.
In a statement to investors CIO Martin Taylor (pictured) says: “After 15 years of managing the Nevsky fund, we have come regretfully to the conclusion that the current algorithmically driven market environment is one which is increasingly incompatible with our fundamental, research orientated, investment process.”
Taylor adds: “The bear market in emerging market equities, which began in 2011, may eventually engulf developed markets too, as the ongoing fall in the US unemployment rate forces the Fed to tighten [interest rates] more quickly than the market currently expects.”
Nevsky Capital is managed by Taylor and Nick Barnes, who launched the original fund, which had AuM of USD3.3bn, while at Thames River Capital. Both previously worked at Baring Asset Management.
Taylor launched the current version of the fund in 2011. According to a statement from Nevsky, the fund’s 18.4 per cent annual gain since 2000 is nearly 10 times more than returns generated by average peers as measured by the HFRX Index.
