Financial Times – New Star has closed two of its hedge funds after withdrawals of the crisis-hit fund manager’s internal capital left them too small to survive.

The manager has shut its three-year-old Firefly fund after Harry Tyser, its manager, quit in December, as well as the six-year-old Apollo fund.

New Star was seized by its banks in December in a debt-for-equity swap and has agreed a sale to larger rival Henderson in a stunning fall from grace for the previously high-flying group.

The closures come as hundreds of hedge funds are expected to shut this year, according to analysts and investors. Many small funds are being closed as their growth prospects recede, while larger funds are shrinking – and some are closing – as they face sizeable withdrawals by their clients.

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apollo, banks, equity swap, fall from grace, financial times, flying group, growth-prospects, internal capital, investors, new-star, withdrawals