Why $1.5 Billion Nevsky Capital Is Shutting Down: The Full Letter

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• Why $1.5 Billion Nevsky Capital Is Shutting Down: The Full Letter
  by Tyler Durden, www.zerohedge.com 
  … And yet, despite its sterling performance, the fund is liquidating for all intents and purposes and returning outside money. Here is the full reason why, from the December letter to clients:
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  Why have Nevsky Capital decided to cease managing the Nevsky Fund?
  The decision to stop managing the Fund, after just over fifteen years, has been a very difficult one. This decision has been driven by a growing recent awareness that certain features of the current market environment, which we believe might persist for a considerable period of time, are inconsistent with the achievement of our goal of producing satisfactory risk adjusted absolute returns for you, our clients.
  ….
  In summary, all of the above factors now mean that it is more difficult than ever before for us to accurately forecast macroeconomic and corporate variables. This pushes up our cost of capital and substantially increases the risk of us suffering substantial capital loss on individual positions either because of a forecast error or simply because we could be caught up in an erroneous market trend, which could then persist for far longer than we could take the pain. This has made what we enjoy most – the thrill of analysing economic data releases and company accounts – no longer enjoyable. It is therefore time to accept that what we have done has worked brilliantly for twenty years but does not work anymore and move on. We are confident our process will eventually work again – for the laws of economics will never be repealed – but for now they are suspended and may be for some time; an indefinite period involving indeterminate levels of risk during which we think it would be wrong for us to be the stewards of your money.
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  The final reason we have decided to cease managing the Fund is our increasing concern with regard the health of the global economic cycle, …
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  read more.

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