A hedge fund connected to a legendary New York real estate family is returning money to investors amid dismal performance

Michael Olshan did not respond to calls and emails, and the fund’s chief financial officer, Lloyd Jagai, hung up on a Business Insider reporter when reached by phone.

In a September letter to clients, O-Cap blamed its losses on poor market conditions, pointing to the rise of passive investment vehicles like ETFs, the disproportionate share of FAANG tech stocks in the S&P 500’s gains, and an overall lack of public sector opportunities. The company was heavily exposed to energy, a bet that took a hit amid oil and gas industry turmoil, losing 8.45% in the first half of this year.

“We do not feel today’s market is rife with attractive buying opportunities in the core sectors in which we focus,” Michael Olshan wrote in the client letter. “In our opinion, market participants are taking on an increasing amount of risk for lower return expectations, and are doing so late in a cycle that has been characterized by strong reflation in asset prices and public equities.”

“Today’s public equity markets can be defined by too much capital chasing a meager set of bargains,” Olshan added. “The result is increased risk taking for lower and lower return expectations.”

The fund continues to manage money for Olshan and his family, and said it sees more opportunities in private company investments.

O-Cap Management is a small fund. Documents filed with the Securities and Exchange Commission say the firm held $14.1 million in gross assets in its primary fund at the end of March, 56% of which belonged to management. Management owned 5% of the smaller fund, which had $5.8 million in assets.

Olshan comes from a prestigious and successful New York business family, and O-Cap at one point had its sights set on raising as much as $1 billion, according to trade publication HFMWeek.

Morton Olshan began buying real estate properties in the 1950s and amassed an enormous portfolio of properties in Manhattan and beyond. Today, Olshan Properties owns and manages “14,000 units of multifamily, 10 million square feet of retail, 3 million square feet of office and 1,447 hotel rooms located across 11 states,” according to the company’s website.

Morton Olshan became a minority owner of the New York Yankees in 2000 and remains a member of the club’s board of directors. He also serves as a member of The President’s Council of the New York Public Library.

Andrea Olshan, Morton’s daughter and Michael’s older sister, runs the family real estate business today.