(HedgeCo.Net) London?based hedge fund Eisler Capital has announced it will wind down operations by the end of 2025 after suffering a steep decline in profitability, mounting costs, and a shrinking capital base. FN London+1
In 2024, Eisler’s profits fell by 65%—from $59.5 million to about $21 million—despite a 40% increase in turnover. The firm’s operating costs spiked, especially wages (up 85%), putting further strain on margins. Assets under management declined from ~$4 billion to ~$3 billion. FN London+1
Founder Ed Eisler cited the difficulty in sustaining competitiveness, attracting talent, and maintaining scale in a crowded landscape as key reasons for the decision. FN London+1
Eisler’s closure is significant, especially for a multi-strategy hedge fund in Europe. It underscores several structural pressures:
- Fee pressure and margin compression: As competition intensifies, funds find it hard to sustain the “2 & 20” model, especially underperforming years.
- Scale vs specialization: Mid?sized funds may struggle to compete on infrastructure, data, and execution relative to large-scale peers or very niche specialists.
- Talent retention and cost: Maintaining high-quality quantitative, operational, and risk teams is expensive. As costs rise, fragile performance magnifies the risk.
- Investor selectivity: Investors are increasingly demanding clear edge, transparency, and alignment. Underperforming funds may face redemptions or capital constraints.
Eisler’s exit will be watched closely. While closures in hedge funds are not rare, each high-profile case prompts reflection across the industry about how sustainable the current business model is—particularly for firms stuck in the middle of the pack.