Hedge Fund OMG To Close Due To Market Environment

Nov 21 2012 | 11:38am ET

Another hedge fund is calling it quits and blaming a frustrating market for it.

OMG Capital will return its US$230 million to investors. Nick Gaze, its chief operating officer, told Financial News that in the "brave new world out there," it simply can't make money.

"We haven't had the liquidity. We can't look investors in the eye and tell them that the market conditions will be conducive to making money any time soon," he said. "We're shutting down from an integrity point of view and a practicality point of view. Our strategy doesn't work in the current environment."

London-based OMG debuted in 2004 and ran a long/short large- and mega-cap stock strategy. The fund peaked at US$930 million in assets in 2009.

The "risk-on/risk-off" market has taken its toll on OMG's returns. After rising 12% in 2008 and 7% in 2009, it lost 3% in 2010 and another 3% last year. It is up just 0.2% this year.

OMG joins hundreds of other funds in throwing in the towel this year, among them former Goldman Sachs proprietary trading chief Pierre-Henri Flamand, who closed his two-year-old Edoma Capital earlier this month, complaining, "I don't think I can make money in this environment."


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