Seneca Capital Investments returns investors’ cash

Doug Hirsch, one of the founders of the Sohn Investment Conference, is winding up his Seneca Capital Investments hedge fund after almost 20 years.

Seneca, which managed about $500 million, has returned the capital to its investors, according to a client letter sent out recently.

The “event-driven” Seneca, which bet on mergers, spinoffs and restructurings, said it lost 6 per cent in 2015 in its domestic fund.

“I am no longer able to continue making the commitment and sacrifices required to run outside capital,” Mr Hirsch said in the letter.

“Despite negligible redemption requests and increasing market opportunities that are the result of a challenging year in event-driven investing, I cannot in good faith start next year with the dedication required to manage your capital.”

Seneca is returning money after the worst year since 2011 for such funds, which on average declined 2.3 per cent through November.

Its closing adds to a roster of hedge funds, both big and small, that have shut in 2015 as the industry struggles to generate profits.

LionEye Capital Management, another event-driven fund, is closing after losses, as is BlueCrest Capital Management,

Fortress Investment Group and BlackRock, which have been active in the Irish market, are liquidating some of their funds.

According to data from Hedge Fund Research, 674 hedge funds liquidated in the first nine months of 2015, compared with 661 in the same period in the preivous year.

Hirsch, who founded his New York-based firm in 1996, said he will continue investing his own money through Seneca and intends to make a "significant" allocation to a fund that his partner, Jon Schwartz, is planning to start.

Mike Anastasio, Seneca's chief financial officer, declined to comment on the changes. The Sohn Investment Conference is one of the hedge fund industry's biggest events and raises money for pediatric cancer research and care. – (Bloomberg)