Deimos Asset Management to Close, Citing 'Challenging Fundraising Environment'

Multi-strategy hedge fund manager Deimos Asset Management is closing its doors after nearly two years in operation, as a difficult fundraising environment claims another alternative investment firm.

The closure was first reported by Bloomberg on Wednesday. As is increasingly the case, investment performance was apparently not a factor in the decision. “Despite our many successes, including minimal drawdowns and our profitability on a performance basis for the year, we have decided to cease the investment management side of the business,” said managing partner Loren Katzovitz in a statement cited by Bloomberg.

“The current fundraising environment has been one of the most challenging in history for hedge funds overall, and there is little visibility as to when conditions will improve,” he reportedly added. “Due to these factors, the overhead for running an institutional-quality fund like Deimos has simply become too high, so we have decided to return capital to Ontario Teachers’ and stop managing funds.”

Launched in early 2015 and based in Purchase, NY, Deimos was organized by the co-heads of Guggenheim Global Trading, Katzovitz and Patrick Hughes, and Mark Standish, a former co-CEO of RBC Capital Markets, who acquired the alternative investment management business from parent Guggenheim Partners.

The deal was completed on January 31, 2015. An anchor investment from the Ontario Teachers’ Pension Plan and a strategic investment from Ares Management followed soon afterwards. 

The firm hired at least six external managers in its first full year, including Point72 TMT specialist Paul Orwicz, former Brasidas Capital Management Asian event-driven executives Jon Withaar and Steve Deitch, event arbitrage expert Charles Slotnick and former Citadel portfolio manager James Warner. 

Early in 2016, Deimos hired former REF Advisors money manager Richard Franzen to focus on a pairs-trading strategy. All told, the company has seven teams of investment managers pursuing a variety of fundamental and quantitative strategies.