Two years ago, Avantium Investment Management was flying high, raising hundreds of millions of dollars for its new emerging markets strategy. But the turmoil faced by those markets recently has seen the hedge fund fall to earth.
London- and New York-based Avantium will return capital to investors and close its doors, Financial News reports. It is unclear how much money remains at the firm; Avantium managed as much as US$800 million less than a year ago, but has since been hit by redemptions, as investors fled plummeting emerging markets funds.
"As appetite for dedicated emerging markets funds decreased, there was an erosion of our assets that compromised our ability to provide an institutional offering," Lucy Blair, Avantium's head of marketing and investor relations, told FN.
Avantium was set up by former Deutsche Bank global macro chief Kay Haigh in 2011, quickly garnering US$600 million of an initial US$1 billion capacity. The firm employs 17 people, among them eight Deutsche Bank veterans led by CEO Arnd Sieling.
Avantium's demise follows Brevan Howard Capital Management's decision to close its emerging markets fund, led by Geraldine Sundstrom. That fund lost 15% last year; Avantium was down only 4.5% in 2013. In 2012, the fund returned 7.5%.