Nekton Capital, the stocks-focused, market-neutral hedge fund firm founded by former York Capital Management Co-Chief Investment Officer Christophe Aurand, is to return capital to investors, after performance failed to meet expectations, according to a report by Bloomberg.

The report cites an unnamed source familiar with the matter as revealing that the London-based firm, which currently manages around $600m – down from a peak of £1bn – intends to focus on managing internal funds.

Nekton Capital has produced positive returns since its inception, but struggled to generate significant gains due to a narrow market driven by a limited number of stocks, according to Bloomberg's source.

Before launching Nekton in 2021, in what was one of the biggest hedge fund debuts of that year, Aurand managed over $10bn in assets at York Capital and helped establish the firm’s international operations in London and Hong Kong. He left the business after early two decades falling its exit from the hedge find peace to focus on longer-term investment products.