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A London-based hedge fund that took a hit from betting against GameStop is shutting down after reviewing its business model, the Financial Times reported on Tuesday.

White Square Capital, which held about $440 million in assets at its peak, suffered double-digit percent losses from its GameStop short position. But the firm bounced back quickly, recovering a fair share of the losses, the FT said, citing a source close to the fund.

Its decision to close down is reportedly unrelated to the battle between individual investors and hedge funds that drove the video-game retailers stock up 1,700% earlier this year.

After evaluating its investing strategy, White Square notified investors in a letter that it would close its main fund and return capital in June, the FT said.

The decision to close down is related to thinking the equity long-short model is challenged, Florian Kronawitter, White Squares chief investment officer, wrote in the letter.

There are way too many fish in the pond with the same strategy of long-short, he said. The traditional edge is being arbed away [eroded by other investors], theres an oversupply of capital.

Despite the UK firm making gains of 19% in 2020, two large investors chose to withdraw their capital to invest in low-cost passive funds or private equity. We experienced first-hand the shift in trend away from hedge fund investing to cheaper alternatives, the fund said in its letter cited by the FT.

White Square was expecting to receive further investor inflows last month, but decided to shut down its fund instead.

The arbitrage opportunities have diminished with both the onslaught of capital caused by central bank monetary interventions, as well as much improved dissemination of information, bringing up the question to what degree the same fees can be justified, it said.

The GameStop retail-trader frenzy, sparked by Reddit day traders banding together to drive the companys stock price higher, ended up torching a handful of other hedge funds including Andrew Lefts Citron and Gabe Plotkins Melvin Capital.

Melvin, which ended the first-quarter down 49%, closed out of its public short positions following the unprecedented trading activity that delivered a rare victory to small retail traders.

Read More: An ex-Goldman trader lays out the 5 sentimental tops that he saw in bitcoin - and shares how far the cryptocurrency has to fall before he would be interested in buying the dip

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