Gabe Plotkin, Chief Investment Officer and Portfolio Manager of Melvin Capital Management LP, speaks at the Sohn Investment Conference in New York on May 6, 2019.

Alex Flynn Bloomberg | Getty Images

Melvin Capital Management, a hedge fund burned by GameStop mania, said it would develop its funds and return the money to investors as losses accelerated during market turmoil this year, CNBC confirmed.

“The last 17 months have been incredibly difficult times for the firm and you, our investors,” founder Gabe Plotkin wrote in a letter to investors. “I’ve given everything I could, but lately it hasn’t been enough to provide the profit you should expect. Now I understand that I need to step away from managing external capital.”

The news of the letter was first reported by Bloomberg.

Last year, Melvin became one of the biggest victims of meme exchanges because of his big short position in GameStop. Citadel and Point72 had to pour about $ 3 billion into Plotkin’s hedge fund to support his finances.

Plotkin failed to make up for losses in the volatile 2022. At the end of the first quarter, the fund fell 21%, and in the current quarter the number could worsen as the technological turmoil intensified in the face of rising rates.

According to regulatory documentation, in the first quarter the hedge fund significantly increased its stake in Amazon and Microsoft. His biggest positions as of the end of March included a number of reruns, such as Live Nation, Hilton Hotels and Expedia.

Melvin said he would not charge a driving fee from June 1.

Earlier this month, CNBC reported that Plotkin had discussed with his investors a new plan under which the firm would return their capital, giving them the right to reinvest the money in a new fund managed by Plotkin.

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