(Bloomberg) — Honeycomb Asset Management — the hedge fund founded in 2016 by Point72 Asset Management alumnus David Fiszel — is returning client cash.
Fiszel told investors that he’s not optimistic as markets recently reached highs.
Honeycomb managed more than $552 million, including leverage, as of December, according to regulatory filings.
“Often, the hardest decision is to do less and remain patient,” Fiszel wrote in an investor letter seen by Bloomberg. “I fully recognize the opportunity cost of capital and believe it should be deployed only at its highest and best use. It is my wish to avoid loss of capital first and foremost.”
A representative for the firm declined to comment.
Honeycomb’s performance this year has been “modestly positive” after two consecutive years of 18% gains, he wrote. The firm, which invests in stocks and private companies, has been far more selective this year and had a “meaningfully lower gross and net exposure.”
Honeycomb liquidated the majority of its stock-picking portfolio last month, and expects to return most investor capital in September, according to the letter.
Fiszel was one of Point72’s top-performing money managers and first started working for the firm in 2000 when it was named SAC Capital. He invested in technology, media and telecommunications companies and left four years later to start hedge fund Rhombus Capital Management. He closed Rhombus in 2007 and returned to Steve Cohen’s SAC — which was later renamed Point72 — the following year before leaving to form Honeycomb in 2015.
The firm will continue to manage client cash invested in any longer-duration private positions. Fiszel will remain invested alongside clients, and the firm will continue to share select opportunities with investors as they arise.
“This is not an exit from investing. It is a reaffirmation of principle,” Fiszel wrote. “I want to deploy capital when the opportunity set clearly justifies the risk-reward.”
More stories like this are available on bloomberg.com