Hedge fund AlphaQuest shuts down after three consecutive years of losses, returns funds to investors

After approximately 25 years in operation, quantitative hedge fund AlphaQuest has decided to close following three consecutive years of losses.

The fund, managed by Nigol Koulajian and with assets of about $2 billion, will shut down and return all capital to investors after experiencing its most severe streak of losses in history. According to a person familiar with the matter, the fund declined 15.2% last year, with a cumulative drop of about 30% since it began declining in October 2022.

The losses have continued into the new year, with the fund falling more than 4% in February alone and down 3.1% year-to-date.

“I have come to the difficult realization that our quantitative models are no longer suited to the current market environment — and this environment may persist indefinitely,” Koulajian wrote in a letter to investors on Wednesday, as reviewed by Bloomberg News.

Despite concerns that corporate valuations are elevated and inflation remains persistent, the S&P 500 Index has continued to rise in recent years.

Koulajian wrote that, in his view, the market headwinds are “too severe” to invest in the way clients expect, stating, “The market is telling me that it is no longer prudent to continue managing client assets.”

A representative for AlphaQuest declined to comment.

Before its rebranding in January 2025, the firm was known as Quest Partners. The company used computer algorithms to trade currencies, commodities, and equity and bond index futures.

Despite AlphaQuest’s recent poor performance, Koulajian stated that the company had not experienced significant redemptions.

Editor: Li Tong