May 10 (Bloomberg) -- Fortress Investment Group LLC, the first publicly traded private-equity and hedge fund manager in the U.S., said it will liquidate its $500 million commodities fund run by William Callanan after losing almost 13% in the past four months.
The Fortress Commodities Fund LP, which declined 4.2% last month, will shut on or around May 23 and money will be returned to investors, New York-based Fortress said in a May 8 regulatory filing with the U.S. Securities and Exchange Commission.
Callanan, who previously worked at Soros Fund Management LLC, started the fund in 2008 with $1.1 billion. It’s the third commodities hedge fund to shutter in the past six weeks after billionaire trader John Arnold said last week that he plans to close Centaurus Energy Master Fund in Houston. BlueGold Capital Management LLP, a $1 billion fund in London co-run by Pierre Andurand, said last month that it will return client money.
Liquidations in the hedge fund industry rose to 775 last year, the most since 2009, according to Hedge Fund Research Inc., a Chicago-based research firm. Zoe Cruz, the former co-president of Morgan Stanley who was ousted in 2007, is liquidating her $200 million hedge fund after losing 8% last year, a person with knowledge of the matter said yesterday.
The Fortress fund lost 8% last year, gained 1.8% in 2010 and 7.3% in 2009, according to filings.
Hedge funds have returned an average 3.4% this year through April after posting a 5.8% loss in 2011 and an 8.2% gain in 2010, according to data compiled by Bloomberg.
Callanan joined Fortress as a portfolio manager in August 2007 after working at London-based hedge fund Rubicon Fund Management LLP, according to 2007 marketing documents. From 2000 to 2003, he was a managing director at Duquesne Capital Management LLC and prior to that he was at Soros Fund Management.
Fortress last week reported first-quarter pretax distributable earnings of $57 million, down 45% from a year earlier. The decline was driven by lower management fees and incentive income. The stock has declined 81% since the firm’s 2007 initial offering and gained 1.5% this year before today.
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