A big-name hedge fund manager is shutting down a key fund

A multi-billion dollar hedge fund firm is shutting down one of its key strategies.

San Francisco-based Passport Capital is shutting its long-short equity fund, which managed about $833 million, people familiar with the matter said.

That fund makes up nearly one-third of the firm's assets.

Passport, founded by John Burbank III in 2000 in San Francisco, is predominantly described as a long-short equity business in a regulatory filing, though it operates other investments across strategies.

Burbank famously shorted the subprime mortgage crisis. Investors in Passport's flagship fund, the Passport Global Strategy, got a 219% payout in 2007, according to a Forbes report from the time. That fund is remaining open, people familiar with the situation said.

Several people in the industry said the shuttering came as little surpise. Assets at the firm have been shrinking on the back of underperformance and investor redemptions, the people said. The people requested anonymity because the information is private.

The fund that is closing fell -2.09% through February of this year and -11.77% last year, according to an investor briefed on the returns.

Passport managed $3.3 billion as of mid-year last year, down 7% from a year prior, according to the HFI Billion Dollar Club ranking. As of January 31, the firm managed about $2.6 billion in regulatory assets, according to an SEC filing.

The firm has also felt a heavy round of staff turnover, Institutional Investor's Alpha reported earlier in April.

Some analysts at the firm have been seeking new jobs for several months, added some of the people who spoke with Business Insider.

John Stavinga, a spokesperson for the firm at external PR agency ASC Advisors, declined to comment or clarify when investors' would receive their money. Bloomberg earlier reported the closure.