New York investment firm Infinity Q Capital Management LLC is liquidating its hedge fund as the fallout from a U.S. regulatory probe into its valuation practices
In January, Infinity Q reported that it managed over $3 billion in assets.
It was forced to liquidate its mutual funds after the SEC found that chief investment officer James Velissaris made potentially unreasonable adjustments to a pricing model used to value fund investments, according to an SEC February 2021 notice.
After unwinding the mutual fund Infinity Q Diversified Alpha Fund, the fund reported that its cash value was approximately $1.25 billion on March 25th. Less than a month earlier, a regulatory filing indicated that the fund had a net asset value of approximately $1.7 billion.
The valuation issues may also affect the company’s main hedge fund, Infinity Q Volatility Alpha Fund LP, which is now being liquidated.
Many holders are believed to be retail investors; accounts at Charles Schwab held 52 percent of the mutual fund’s shares, according to an SEC filing from a year ago. The State Teachers Retirement System of Ohio, a $95 billion fund, held a $53 million investment in an Infinity Q hedge fund as of January.