Private equity giant The Carlyle Group is liquidating its only hedge fund, Carlyle-Blue Wave Partners Management, less than 16 months after its debut.

Blue Wave failed to achieve “the critical mass of assets under management necessary to support a multistrategy fund infrastructure,” Carlyle said in a statement. The fund, a joint venture between Washington, D.C.-based Carlyle and former Deutsche Bank executives Rick Goldsmith and Ralph Reynolds, opened with $900 million last April, but has fallen to about $600 million. Carlyle had set a $1 billion goal for the fund.

Blue Wave suffered badly during the credit crisis last year, before abandoning fixed-income investments. The fund lost 10% last year on debt and residential mortgage-backed securities investments—it was down by as much as 15% at one point—and faced redemption requests from investors. The new equity-only strategy was up 2% this year, but would have needed to return 9% before Blue Wave could begin charging performance fees.

“This is an orderly liquidation to ensure fair and equitable treatment of all investors,” Carlyle spokesman Chris Ullman said, in stark contrast to the firm’s Amsterdam-listed MBS fund, which had its assets seized by lenders after it missed margin calls in March.

Blue Wave employed roughly 40 people.