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    BlueMountains flagship fund is losing money so far this year even as the rest of the industry surges, and its just the latest blow for the hedge fund

    The turn of the calendar to 2019 has not been kind to Andrew Feldstein’s BlueMountain Capital.

    BlueMountain’s flagship fund, Credit Alternatives Fund, lost nearly 4% in the first quarter before rebounding slightly in April, according to an investor letter obtained by Business Insider. As of the end of April, the fund was still losing money.

    The roughly $19 billion firm has also cut two of its three equity strategies this year, and a large investor in the firm’s business believes the manager’s growth prospects have “ declined significantly.” This streak of bad news is all happening while the hedge fund industry enjoys the best start to a year in a decade.

    BlueMountain, which is best known for its credit funds and its London Whale trade in 2012, expanded into equities in recent years but is now pulling back on the asset class. The firm had already unwound its traditional stock-picking strategy after just two years of trading earlier this year, and its only other stock strategy, event-driven equity, has a large position in the embattled California utility company PG&E.

    BlueMountain cut its exposure to its own systematic equity strategy, which had lost 1% in the first quarter and is in the process of being completely wound down. The money allocated to that strategy is going to be reallocated across other better-performing strategies, the letter said. That includes BlueMountain’s credit, fixed income, arbitrage, and private capital strategies.

    A source familiar with the firm’s thinking said the systematic strategy returned more than 4% last year, and it reportedly ran $1 billion.

    BlueMountain’s underwhelming performance comes at a time when hedge funds as a whole have been notching quality returns. According to eVestment, the average hedge fund has returned 6.52% through April — the best start to a year since 2006.

    See more: We got a copy of billionaire hedge-fund manager Seth Klarman’s letter to investors — here are his 5 biggest warnings about the economy

    Blue Mountain’s poor performance has caused one of its big investors to write-down the business. Affiliated Managers Group, which buys stakes in asset managers and outright owns others, wrote down a non-cash expense of $415 million for the first quarter, saying in a filing that BlueMountain’s growth expectations had “declined significantly.”

    “Recent performance, and especially the first quarter’s performance, was really challenging,” said AMG’s CEO Nathaniel Dalton on the company’s first quarter earnings call.

    AMG expects BlueMountains compounded fees on asset growth will shrink 13% every year for the next five years, according to the filing.

    “As a multi-strategy asset manager, BlueMountain Capital Management continuously assesses and adjusts its strategies to address clients’ needs, respond to changing markets and optimize performance,” a spokesman for the firm said.

    See more: $9 billion hedge-fund manager David Abrams, who rarely makes public appearances, lays out his investing strategy — and cautions against being too patient

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