Equinox Energy Fund Implodes After Dismal Performance

July 28, 2019 | Hedge Funds
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The energy fund shuts down after losing 85%

Equinox Energy Fund is shutting its doors.

In one of the most painful letters to shareholders ever written, Equinox fund manager Sean Fieler announced plans to liquidate the fund after an 85% loss.

In his closure letter, Feiler wrote:

“Our incredibly bad performance over the past four and a half years is a result of several factors. Bad stock picking, a bear market in E&P companies, a bear market in Western Canadian energy prices, and a bear market in the smaller cap energy companies upon which we focused.

Losses wipe out Equinox Energy Fund

From the start of 2019 to June 30, Equinox fell 26.9%.

This decline followed a 74.7% loss in 2018. Feiler provided an explanation into the firm’s strategy and where it went wrong.

“The number of companies that Energy Fund is holding has fallen to just four,” Fieler continued. “As such, we believe it is appropriate to close the Equinox Energy Fund at year-end. Those investors who wish to maintain their exposure to Paramount and Crew will be better served by realizing their tax loss on our fund and maintaining their exposure independently.”

Deep regret

The fund manager expressed sincere regret for launching the fund in January 2015. He noted that energy prices had rebounded. But Feiler noted that “additional factors” acted together to cause additional losses.

Feilder concluded: “At the time, we were confident that energy prices would rebound to more sustainable levels. That turned out to be correct. But, we failed to anticipate all of the additional factors that cumulatively would lead to such a sizable loss of your capital. We are humbled by this experience and have sought to incorporate the difficult lessons learned in the management of our other funds.”

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