Quantitative hedge fund AlphaQuest is shutting its doors after suffering three consecutive years of losses, marking the end of a roughly 25-year run for the $2bn firm led by founder Nigol Koulajian, according to a report by Bloomberg.
AlphaQuest is winding down operations and returning capital to investors following what sources describe as its worst-ever losing streak. The fund fell 15.2 per cent last year and is down around 30 per cent since losses began to mount in October 2022. Performance has deteriorated further in early 2026, with the fund down more than 4 per cent in February and showing a year-to-date loss of 3.1 per cent.
In a letter to investors, Koulajian said the firm’s quantitative models were no longer well suited to current market conditions, which he suggested could persist for an extended period.
“I have come to the difficult realisation that our quantitative models no longer properly fit the current market regime,” Koulajian wrote, adding that market headwinds were now “too severe” to continue managing client assets in a way that met investor expectations.
The decision comes despite broader equity markets continuing to rally in recent years, even as concerns over stretched valuations and sticky inflation linger. Koulajian said that, in his assessment, the market was effectively signalling that it was no longer prudent for him to remain active as a capital allocator.
AlphaQuest, which rebranded from Quest Partners in January 2025, traded futures across currencies, commodities, and equity and bond indices using computer-driven strategies. More recently, it expanded into individual stock selection and so-called carry trades, borrowing in low-rate jurisdictions to invest in higher-yielding markets.
The firm had positioned itself as an all-weather strategy with a particular edge during periods of volatility — an approach that paid off handsomely during the 2008 financial crisis, when the fund posted gains of nearly 56 per cent as global equities collapsed.
Despite the recent run of losses, Koulajian said AlphaQuest had not experienced material redemptions, attributing the orderly wind-down to the trust investors had placed in the firm.
“It is precisely because of that trust that I am making this decision now,” he wrote, “as I believe it is the right course of action for clients.”
