Multibillion-dollar stock hedge funds, Joho Capital and Scout Capital, told their investors they were closing. Scout managed $6.7 billion and Joho about $5 billion

Hedge-Fund Firm Exis Capital to Shut Down

Exis Managed Just $75 Million at the End of 2013

JULIET CHUNG

Updated Feb. 3, 2014 6:06 p.m. ET

New York hedge-fund firm Exis Capital Management Inc., run by prominent art collector Adam Sender, is shutting down following poor performance last year, according to people with knowledge of the matter.

Founded by Mr. Sender, an early employee of SAC Capital Advisors LP, the 16-year-old Exis once managed more than $1 billion but managed only about $75 million at the end of last year. The firm’s fund lost 5.1% last year, according to a fund document.

Exis joins other hedge funds that plan to close. Two multibillion-dollar stock hedge funds, Joho Capital LLC and Scout Capital Management LLC, also of New York, separately told their investors last week they were closing. Scout managed $6.7 billion and Joho about $5 billion.

Exis’s investment strategy was to bet on the direction of instruments experiencing volatility, such as U.S. stocks, oil or gold.

Investors hadn’t been notified as of Sunday, according to one of the people. It was unclear Monday why Mr. Sender has decided to close the firm or what his plans are. Some of Exis’s employees will be retained, the person said.

Mr. Sender, 45 years old and a prominent collector of contemporary art, repeatedly has said a 2006 lawsuit against Exis by the Canadian insurer Fairfax Financial Holdings Ltd.FFH.T +0.19% had hurt Exis’s ability to raise money.

Fairfax sued Exis and Mr. Sender, along with other hedge funds and individuals, saying they were part of a group that targeted the Toronto company in a alleged short-selling scheme. A New Jersey State Court judge dismissed the suit against Exis and Mr. Sender in 2012.

The closing marks a reversal from Mr. Sender’s plans to grow the firm.

“Our company plays by the rules and this lawsuit should never have been filed in the first place,” Mr. Sender said in a statement at the time of the suit’s dismissal. “Our plan is to move forward and work to re-establish Exis Capital as one of the leading hedge funds in the world.”

The firm’s average annualized return since inception was 16.4% after fees, according to a fund document, with three losing years in its history. In 2008, when hedge funds on average lost 19%, Exis returned 15%.

Mr. Sender started Exis after his time as a trader at Steven A. Cohen’s SAC, instituting performance fees of 50% just as SAC had. Exis charged no management fees, unlike SAC.

Mr. Sender, who moved to Florida several years ago, is known for considering art as an investment. His sales of 30 contemporary art works in 2006 totaled more than $19 million, a sixfold return on his investment.

For a week three years ago, he transformed his Miami home into an exhibition venue to capitalize on the art crowds coming to Art Basel Miami Beach.

Mr. Sender was an early buyer of the works of Richard Prince, purchasing works by him beginning in 1999, before other fund managers discovered him. And Mr. Sender didn’t shy away from the controversial; Dealers have said Mr. Sender bought one of British artist Chris Ofili’s elephant-dung paintings at auction for more than $1 million in 2005.

Mr. Sender also was swept up in the federal investigation of private-eye-to-the-stars Anthony Pellicano, whom Mr. Sender had hired more than a decade go to look into a business dispute in Hollywood. Mr. Sender was one of several witnesses who testified against Mr. Pellicano in a 2008 trial; Mr. Pellicano was convicted on charges related to wiretapping and conspiracy.

In recent years, some macro investors—Exis also employed some macro strategies—have spoken about the difficulty of investing, given central banks’ actions.

Louis Moore Bacon told investors in 2012 that he was returning $2 billion in investor money, or what was then a quarter of his flagship hedge fund’s assets under management, citing recent poor returns and government intervention.

Exis’s planned closure likely adds to the number of hedge-fund investors looking to put their money into other hedge funds.