Octavian Advisors is closing its doors, with the activist hedge fund bemoaning the "exceptionally difficult" investment environment.
The $1 billion New York-based firm will end its six-year run sometime next year. The firm said it would conduct an orderly liquidation and asked investors to keep quiet to allow it to "monetize the fund's investments as smoothly and efficiently as possible." The ploy, obviously, didn't work, as the letter announcing the liquidation was leaked to Reuters.
Octavian founder Richard Hurowitz told clients that they'll get some of the their money back by the end of the year, but that most will come next year. The fund is down 11% this year through August, according to Reuters.
"While we have significantly outperformed the international equity markets we focus on over a multi-year period, we have not generated attractive absolute returns in an exceptionally difficult environment," Hurowitz wrote. "The last 18 months have been particularly difficult."
"We are deeply frustrated by a market that is driven almost entirely by macroeconomic and political decision-making in the short and immediate term, where idiosyncratic investments and analysis are overwhelmed by the broader backdrop, and where events have become more and more difficult to effectuate and analyze," he continued.
"We believe the world is currently presenting fantastic investment opportunities, but it is difficult to take advantage of them in a hedge-fund structure with monthly mark-to market benchmarking and quarterly liquidity."
Octavian's decision to pull the plug comes just a year after it opened a London office in hopes of taking advantage of the European debt crisis.