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Hedge fund liquidation letters are like snowflakes. Each is different in its own special way, but they’re, necessarily, broadly the same. Also, they are nearly as numerous.

Still, in spite of their individual precious and tiny differences, one can build a taxonomy of the manager saying goodbye to his (nearly always his) clients and their money. There are the Dear John letters, informing loyal investors that the manager has found something better to do, generally in the philanthropic realm, than continue to lose their money the old fashioned way. There are the Insincere Resignation Speech letters, where managers tell their customers that it’s not that they don’t want to manage money anymore, it’s just that they don’t want to manage their money anymore, preferring instead to spend more quality time with their family (office). There are the Act of God letters, in which a fund’s failure is the fault of completely unpredictable and unforeseeable markets totally fucking over a good and wise hedge fund manager whose job it was to either predict or foresee the markets, or otherwise position himself to make money (or at least not lose a ton of it) in the face of unpredictable and unforeseeable markets. Some of these latter letters fall into a further subgroup, those in which a departing manager takes a modicum of responsibility for burning your money on an open fire, although generally the liability is limited and most blame falls on other people/things/malign forces.

And then, every now and again, a seven- or eight- or 100-sided snowflake appears, with genuine contrition and actual acceptance of (nearly complete) responsibility. And in this broiling, miserable July, one such snowflake has fallen from the 27th floor of 623 Fifth Avenue, offices of Mason Hill Partners, managers, until now, of the Equinox Energy Fund, down 26.9% this year and 85% since inception.

Our incredibly bad performance over the past four and a half years is a result of several factors. Bad stock picking, a bear market in E&P companies, a bear market in Western Canadian energy prices, and a bear market in the smaller cap energy companies upon which we focused….

As such, we believe it is appropriate to close Equinox Energy Fund at year end. Those investors who wish to maintain their exposure to Paramount and Crew will be better served by realizing their tax loss on our fund and maintaining their exposure independently….

More broadly, we wish to express our deep regret for having launched this fund in January of 2015. At the time, we were confident that energy prices would rebound to more sustainable levels. That turned out to be correct. But, we failed to anticipate all of the additional factors that cumulatively would lead to such a sizable loss of your capital. We are humbled by this experience and have sought to incorporate the difficult lessons learned in the management of our other funds.

That is some serious sugar de-coating, Sean Fieler. “Bad stock picking. “Better served by realizing their tax loss.” “Maintaining their exposure independently.” “Wish we had never been born.” We appreciate and, if we’re being honest, sort of relish your honesty. But you’re also kinda bringing us down.

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