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Hutchin Hill Shuts Down – Letter

Another one bites the dust – Neil Chriss of Hutchin Hill is shutting down his hedge fund, according to a November 30th letter to investors obtained ValueWalk. The famed macro hedge fund which bet against JPMorgan in the London Whale saga, blamed the closure on poor areturns. While Chriss says he is proud of his employees he admits that the hedge fund did not deliver. Surprisingly and admirably, Chriss did not try to blame others like the Fed or BOJ for the low returns over the past three years. Specifically, Chris states:

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This decision is not about one year of performance, which has been disappointing. We have not delivered on our performance goals for three years in a row. During this period, we sought to adapt and invest in talent and strategies to ensure we had the best team to generate long term results for our investors. We fought hard, but did not deliver the performance that you expected from us.

Neil Chriss
Stock photo of a whale representing the famed London Whale trade or another big hedge fund closure, or something else!12019 / Pixabay

As we walked through our 2018 plan and resources, we had to decide whether to continue to manage a multi-strategy business with fewer teams, fewer support staff, and, in my opinion, a diminished ability to generate P&L. We explored a variety of options and it became apparent that moving forward with a smaller team and capital base would not be in the best interests of our investors. Accordingly, I and the rest of the management team at Hutchin Hill together determined that the best decision is to proactively return capital as expeditiously as possible.

In terms of operations, Neil Chriss told employees and investors:

Our expectation is that all investors will receive their capital by the end of the first quarter of 2018. In order to facilitate an orderly liquidation of the fund and ensure that all investors are treated fairly, as contemplated by the fund documents, redemptions from the fund have been suspended. Any investor who has submitted a redemption request for December 31, 2017 will not be receiving capital back at the end of January and instead will receive their capital back at the same time as everyone else.
I am extremely proud of the organization we built over the past nine years and the 83.2% net cumulative since inception returns and the 6.6% annual returns, all with a -0.06 correlation to the S&P since inception, that we generated*.

Next journey? Neil Chriss writers:

As for my next steps, I plan to continue focusing my energy on quantitative investing, an area in which I am deeply passionate and have spent the bulk of my career.

The news of the closure comes only a few years after Neil Chriss opened a London based office.

The closure was first reported earlier today by Svea Herbst-Bayliss of Reuters