Jeff Talpins’s Element Capital Management will return about $4 billion to external clients, telling them it wants to be smaller to improve performance and move toward managing mostly its own capital.
The hedge fund, which lost about 20% of investors’ money after three straight years of declines, isn’t returning capital on a pro rata basis, according to people with knowledge of the matter. Instead, it’s kicking out select smaller clients and allowing larger ones — some of whom pay higher fees — to stay in and potentially recoup their losses. The fund climbed 6.7% in the first quarter.