Melvin, which lost nearly $7 billion
early last year by betting on stocks like GameStop would tumble,
is targeting a size of between $4.5 billion-$5 billion and told
investors that its maximum total assets under management should
remain between $6.5 billion and $7 billion until June 2027, when
this threshold could be changed, the source said.
To remain within this limit, Melvin intends to return capital to
investors every time it reaches $7 billion for more than 90
consecutive days, according to the source who did not want to be
identified because the discussions are private.
Gabe Plotkin, the founder of Melvin, had been betting since 2014
that GameStop shares would tumble as the world shifts away from
the brick-and-mortar video retailer's offerings.
But retail investors banded together to support GameStop,
sending it surging more than 2,500% in January 2021. By the end
of the month, Plotkin had closed the short position on the
so-called meme stock, but the hedge fund lost 39% last year.
Melvin intends to charge fees ranging from 15% to 25% under this
new structure, down from its previous performance fee of 20% to
30%, the source said.
The Wall Street Journal and CNBC reported earlier on the fund's
restructuring.
(Reporting by Carolina Mandl, in New York, and Manya Saini in
Bengaluru; Editing by Amy Caren Daniel, Bernard Orr)
[© 2022 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
![](column_spacer.png)
|
|