Now they may have to look at smaller funds that play in more niche-oriented strategies. And here there were some winners.
Verition Fund Management, which oversees $365 million, is up 5.5 percent this year after a 14.3 percent gain in 2015, a person familiar with the situation said. The firm runs strategies that bet on appraisal rights arbitrage, Canadian convertible arbitrage and ETF arbitrage.
Crestline Summit Equity Alpha, a 12-portfolio manager, $375 million strategy gained 5 percent through November, a person familiar with the fund said. Ari Glass' Boothbay Fund Management is up roughly 4 percent this year after a 10 percent gain last year, with a maximum drawdown of 1.4 percent when other funds lost a lot more.
"Being up 4 percent isn't exactly killing it but considering what the bulk of the players are doing, that is pretty good," said another investor who is not authorized to speak publicly.
The average multi-manager fund is up 2.8 percent this year, compared with the S&P 500 Index' 10.8 percent gain.
Firms mentioned in the story either declined to comment or did not return calls seeking comment.
This article was provided by Reuters.