JPMorgan's Highbridge Capital is unwinding a $2 billion fund and is now turning to investor demand for credit

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JPMorgan's Highbridge Capital is unwinding a $2 billion fund and is now turning to investor demand for credit

Jamie Dimon

Getty/Mark Wilson

JPMorgan's global alternatives business has $150 billion in assets.

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  • JPMorgan's Highbridge Capital believes investors want more specialized hedge funds so it is shutting down its $2 billion multi-strategy flagship fund.
  • Three of the four lead portfolio managers will stay on to the run the new multi-strategy credit fund.
  • More hedge funds were liquidated than launched last year as new funds were at their lowest levels in 18 years, according to Hedge Fund Research.
  • Click here for more BI Prime stories.

JPMorgan's Highbridge Capital is winding down its long-running $2 billion multi-strategy fund and will now focus on its credit business.

The fund, which invests across fixed income, equity, macro, credit and other asset classes, will give investors the opportunity to invest in Highbridge's new multi-strategy credit offering or get their money back by the end of the third quarter, a JPMorgan spokesperson confirmed.

Three of the fund's four lead portfolio managers will run the new credit fund, including the multi-strategy fund's CIO Mark Vanacore. The portfolio manager leaving the firm, Arjun Menon, will start his own Asia-focused fund that Highbridge and JPMorgan supports, a source familiar with the firm told Business Insider.

The two portfolio managers that led the credit arm within the multi-strategy fund, Jason Hempel and Jon Segal, will stay on with no changes to their team.

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See more: A $10.5 billion fund at Canyon Partners has loaded up on cash amid a shaky stock market

The change was forced by investors' preference for more specialized strategies over its broad multi-strategy offering, a JPMorgan spokesperson said.

"As markets and clients evolve, we continue to innovate and examine our alternatives offering to ensure we deliver the solutions clients want and need today and into the future," the spokesman said.

Highbridge isn't the only major fund to shut down in the last several months. More hedge funds were liquidated than launched last year as new funds were at their lowest levels in 18 years, according to Hedge Fund Research.

Billionaires Leon Cooperman and David Tepper have both announced plans to turn their long-running hedge funds into family offices in the last eight months. BlueMountain Capital Management has responded to investors' demand for more specialized funds by axing its long-short equity and systematic stock-picking funds to focus on the credit strategies the firm made its name in.

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Highbridge Capital was founded more than 25 years ago by billionaires and childhood friends Glenn Dubin and Henry Swieca. JPMorgan bought a majority stake in the manager in 2004, and then bought the rest of the firm in 2009.

See more: Billionaire Steven Schonfeld poaches a top quant from Glenn Dubin's Engineers Gate to run a new fund

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