Seven Eight Capital Shuts Down After Investor Redemptions, Following Brief Independence from Schonfeld

Seven Eight Capital, a quantitative hedge fund that spun out of Schonfeld Strategic Advisors just one year ago, is shutting down operations after experiencing significant investor redemptions, according to a Business Insider report. Sources familiar with the matter indicated that the firm’s closure followed withdrawals from two major investors. A regulatory filing revealed that most of the firm’s 22 employees are expected to leave as part of the wind-down process.

At its peak, Seven Eight Capital managed around $500 million in assets and had been operating under Schonfeld’s multi-manager platform for over a decade before becoming independent. The firm was spun off as part of a broader restructuring and cost-cutting initiative at Schonfeld.

Despite the closure, there is a possibility that Seven Eight may continue to operate in a more limited capacity. The firm could potentially manage assets through a separately managed account for an existing hedge fund, though this would represent a significant reduction in scope compared to its original operations.

Seven Eight Capital’s brief tenure as an independent firm has been marked by challenges in maintaining investor confidence, which has ultimately led to the firm’s closure. Its experience highlights the difficulties some hedge funds face when transitioning from a larger, well-established platform to independent operations. With investor redemptions continuing to impact smaller funds, Seven Eight’s winding down serves as a cautionary tale in the competitive hedge fund industry.

The firm’s closure also follows a broader trend within the industry, where hedge funds, particularly newer and smaller ones, face increasing pressure to deliver consistent returns and maintain investor loyalty. It remains to be seen whether the key individuals behind Seven Eight Capital will pursue other ventures within the hedge fund space or leave for different opportunities.