Melvin Capital says it plans to close the fund

Gabe Platkin, chief investment officer and portfolio manager at Melvin Capital Management LP, speaks during the Sohan Investment Conference in New York, May 6, 2019.

Alex Flynn | Bloomberg | Getty Images

Hedge funds burned by Melvin Capital Management, Gamestop Mania, said it would open up its funds and return cash to investors as losses accelerated during market volatility this year, CNBC confirmed.

“The last 17 months have been an incredible effort for the firm and you, our investors,” founder Gabe Platkin wrote in a letter to investors. “I have given everything I can, but lately it is not enough to give you the expected return. I now admit that I have to move away from managing external capital.”

The letter was first reported by Bloomberg.

Melvin was the biggest victim of the meme stock frenzy last year due to the large and small location of the gamestop. Citadel and Point72 had to deposit about $ 3 billion in Platkin’s hedge fund to finance it.

Plotkin has failed to recover losses in a volatile 2022 Funding was down 21% at the end of the first quarter, and the numbers could be even worse in the current quarter as the technology-driven path intensifies in the face of increasing rates.

According to a regulatory filing, the disrupted hedge fund significantly increased its partnership with Amazon and Microsoft in the first quarter. Its biggest locations since the end of March include a number of re-opening dramas, such as Live Nation, Hilton Worldwide Holdings, and Expedia.

Melvin says it will not charge management fees from June 1.

CNBC reported earlier this month that Plotkin had discussed with its investors a fancy plan under which the firm would return their capital, while giving them the right to reinvest money that would originally be a new fund run by Plotkin.

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