Kamunting Street Capital’s founder Allan Teh said that the firm is planning to return outside capital and will convert into a family office to manage the investments.
The $1bn hedge fund is shutting down following losses on high-yield or junk energy company bonds as well as due to other misfires in a jumpy atmosphere for fixed income.
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Teh said that he will continue to manage his own wealth in a family office. Kamunting currently manages less than $300m as redemptions have rolled in.
Teh said: "In a zero interest-rate environment, it’s much more difficult to make money without taking more risk."
He added that the firm’s largest investor was not interested in having a large exposure to the credit strategy he trades.
The firm has roared back to an 88% rise in 2009 by buying up fixed-income assets that rebounded along with the financial recovery. The fund lost 4% last year and was down 2% so far this year.
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