BlueLine Asset Management, a hedge fund established by former JPMorgan executives, is set to close its operations after five years, reflecting the mounting pressures facing Brazil's investment industry, according to a report by Bloomberg.

The São Paulo-based firm, which managed BRL300m ($50m) as of October, announced it will cease all activities by early next year.

In a statement released Tuesday, BlueLine attributed the closure to “strategic and cyclical challenges” and noted that a shareholders’ meeting will finalise the firm’s liquidation process, including the redemption of shares.

BlueLine's closure comes amid a difficult period for Brazil’s hedge fund industry, which has been hit hard by continued redemptions. Many investors are opting for fixed-income instruments and tax-exempt products, spurred by Brazil’s double-digit interest rates. According to Anbima, Brazil’s capital markets association, hedge funds in the country have faced net outflows exceeding BRL324bn this year through November.

BlueLine was launched in 2019 by Giovani Silva, who brought 17 years of experience trading Latin American markets at JPMorgan. The firm also included Fabio Akira Hashizume, another JPMorgan veteran, as head of research.