Value fund manager AJO to wind down business after losses

Quantitative fund manager AJO Partners said on Wednesday it will shut down its business at the end of the year and return money to its clients after suffering steep losses in several of its value funds.

The group, which manages $10 billion in assets, will stop trading on Nov. 30 and wind down its business on Dec. 31, its founder Ted Aronson said in a memo to clients that was seen by Reuters.

"Our decision to close is in response to market forces. We still believe there is a future for value investing; sadly, the future is unlikely to arrive fast enough - for us," he wrote in the memo.

Value stocks or shares of economically sensitive companies trading at multiples that are usually below those found on growth names have been among the laggards in the market's rally from its lows in March.

Value sectors such as retail have struggled for years as their business models get disrupted in a shift to a more tech-driven world, a process that has gathered pace during the coronavirus pandemic.

"The length and the severity of the headwinds have led to lingering viability concerns among clients, consultants, and employees," the group founder noted.