HFRI Fund Weighted Composite

With several months having passed since the last prominent hedge fund closure, the recent narrative that the 2 and 20 community was doing exceedingly well to close out the year (with long/shorts piling into tech names with record leverage), was starting to gain traction. That may have changed this afternoon, when Reuters reported that well-known hedge fund manager Neil Chriss announced he is liquidating his $2.2 billion firm Hutchin Hill Capital LP after three years of poor performance. The firm lost roughly 5.5% in the January-November period after having been up 4.7% in 2016.

The hedge fund industry is finding itself in increasingly dire straits as persistently weak returns and the advent of low-cost investing have forced more and more funds to shut down. So, it's unsurprising that, amid this steadily worsening backdrop, more traders are heading for the exits. But where are the heading? Increasingly, more traders are moving back from where they came - i.e. the big banks, which expect to see a boost in trading revenue as President Donald Trump has vowed to dial back postcrisis regulations that forced banks to wind down their prop desks.