U.S. Markets

Activist hedge fund firm Orange Capital to shut: sources

NEW YORK (Reuters) - Orange Capital, the activist hedge fund firm led by New York-based real estate investment manager Daniel Lewis, is shutting down after a year of poor performance, according to people familiar with the situation.

Its main hedge fund was down 7.4 percent net of fees in 2015 through November, according to investor information seen by Reuters. Performance for December and January was not available.

A group of stocks in Orange’s portfolio, worth about $1.3 billion as of September 30, according to a public filing, declined substantially over 2015.

Bellatrix Exploration, a Canadian oil and gas company where Lewis is a director and had pushed for change, saw its stock drop about 60 percent. NorthStar Asset Management Group, a New York-based real estate and investment manager, fell 46 percent. And Amaya Inc., a Canadian entertainment technology company, declined nearly 40 percent.

Lewis was not immediately available for comment. A spokesman for Bellatrix declined to comment and InnVest Real Estate Investment Trust, another Canadian company that Lewis is a director of, did not respond to a request for comment.

Orange, co-founded by Russell Hoffman, its president, had otherwise produced strong returns. Its main fund averaged annual returns of 9.7 percent since inception in mid-2005. That compares to a 5.15 percent gain over the same period by the Absolute Return Event Driven Index, which tracks similar funds.

The news was first reported by The Wall Street Journal.

Reporting by Lawrence Delevingne; editing by Grant McCool