Dmitry Balyasny Shutters His Own Best Ideas Hedge Fund

(Bloomberg) -- Dmitry Balyasny, who created a hedge fund during the financial crisis to trade on his best ideas, has closed it after poor performance this year.

Balyasny Asset Management shut down the Atlas Fundamental Trading Fund after deciding it’s more cost effective to manage the capital within Atlas Enhanced, the levered version of the firm’s flagship vehicle, according to a person familiar with the situation. Atlas Fundamental had lost all of its outside capital and shrunk to no more than $150 million in assets when it closed, the person said.

The Chicago-based hedge fund manager, which was founded in 2001, has posted lackluster performance this year, trailing multistrategy rivals like Citadel and Millennium Management. Atlas Fundamental, billed in marketing materials as providing “direct access to Dmitry Balyasny,” declined about 5.9 percent this year through Aug. 24, and Atlas Enhanced is up less than 1 percent through Sept. 21, according to investor documents. Balyasny declined to comment.

The firm allocates capital to roughly 80 internal teams that specialize in strategies ranging from credit and global macro investing to quantitative systematic and equity trading. Its client assets totaled about $10.8 billion as of March 1, down from $12.7 billion a year earlier. As the firm’s head, Balyasny runs a portfolio within the main fund and allocates capital among the various teams.

Atlas Fundamental operated differently. Balyasny had ultimate discretion over the fund and decided how much leverage it employed, according to company documents. It primarily traded stocks tied to the best ideas from Balyasny and the firm’s portfolio teams. The fund also made macro bets in highly liquid financial instruments, such as futures, based on his market views.

Atlas Fundamental started amid the 2008 financial crisis with the goal of providing uncorrelated returns and preserving capital, particularly during down markets. Balyasny and other insiders owned about 35 percent of the fund, according to a December 2017 filing. Net assets stood at $308 million in December before investors fled this year and the fund closed.

©2018 Bloomberg L.P.