Meditor Capital Management, the London-based hedge fund firm that managed $3.1 billion as of July, is liquidating its main funds, according to a letter to investors Thursday obtained by CNBC.com
Meditor is up about 16 percent so far this year, but founder Talal Shakerchi cited declining opportunity for his European focused equity funds in deciding to return investor capital. He specifically noted transaction taxes, lower liquidity and new disclosure rules around short positions.
"In summary, we are no longer confident that we can continue to offer good value to our clients on our current scale," Shakerchi wrote in the letter.
It's not clear if the firm will survive after returning most capital to investors. Meditor did not immediately respond to a request for comment.
"This is yet another example of how challenging it's been on the short-side this year," Rick Teisch, director of research at fund of hedge funds Liongate Capital, said. "When high-quality shops like Meditor and Axial shut down, it makes me think that we've reached a breaking point for the equity market."