Actionable news
All posts from Actionable news

Fortress Investment Group Plans to Close Flagship Macro Hedge Fund

A troubled year on Wall Street has brought down one of its biggest stars.

Michael Novogratz will leave Fortress Investment Group FIG -3.37 % LLC and the private-equity and hedge-fund firm will close the flagship macro hedge fund he runs after it suffered heavy losses and redemptions, according to people familiar with the matter.

Fortress’s macro fund, launched in 2002 to bet on global macroeconomic shifts by trading equity, debt, commodity and currency markets, is down 17.5% so far this year through September, according to a regulatory filing. The fund has been hurt by investments in Brazil, a market that has come under pressure in recent months, among other areas, an investor said. Macro funds on average have lost 0.6% this year through September, according to research firm HFR.

The Fortress fund manages about $1.6 billion today, down from more than $8 billion in 2007.

The closure of the Fortress fund, expected to take place before the end of the year, highlights a lackluster run for the hedge-fund industry. Hedge funds are down an average 3.8% in 2015, through September. That beats the 6.4% total loss by the S&P 500 in that time frame, but is worse than the 1.1% total return of the Barclays U.S. Aggregate Bond Index. Hedge funds tout their ability to produce steady returns in almost any environment, and their lagging of the bull market over the past several years has caused some clients to take a harder look at their value.

Multibillion-dollar hedge funds including David Einhorn’s Greenlight Capital Inc. and William Ackman’s Pershing Square Capital Management LP are having their worst year since the financial crisis. Some smaller hedge funds, including Bain Capital LLC’s macro fund Absolute Return...