The music stopped for Chicago-based hedge fund Sellers Capital in the third quarter after two previous quarters of high-octane returns. The firm—which managed $230 million as of July—reported a net loss of 49.96% in Q3 after running its flagship fund at breakneck gains of 65% in the first half.

Through September, the Sellers Capital Fund is down 24.46%. 

In a letter to investors, Mark Sellers, managing partner, said he did not expect his first-half run to continue and was not surprised at all about the direction the fund took during the third quarter. “I am, however, very surprised about the extent and rapidity with which it happened,” he wrote.

“Talk about a mean reversion (in more ways than one!) After this quarter’s performance, the fund is still ahead of the broader market by about 20% annually since inception. I realize that’s little consolation for those who have added capital to the fund this year.”

In light of the fund’ miserable returns, Sellers tried to highlight a few bright spots. He said although the fund isn’t buying Contango Oil and Gas Stock, the energy company is buying back stock, which will help the fund.

“If the company buys back 10% of its shares, our ownership goes from 15.8% to 17.5%. This is the same as if we bought 315,000 shares on the open market at current prices…So in this respect, the price decline is a good thing.”

He also said the fund didn’t buy any banks or mortgage-related stocks, or any companies in financial distress last quarter. And Sellers noted that the fund is still doing well on both a relative and absolute basis over the trailing 12 months. However, he acknowledged that this isn’t much consolation to those who came into the fund recently.