Passport Capital is closing its 17-year-old flagship hedge fund, Passport Global Fund, at the end of the year and will return investor capital in January.

Despite efforts to improve the investment process for the Passport Global Fund in "historically expensive markets," the fund's performance over the past two years was "unacceptable," said John H. Burbank III, founder and chief investment officer, in a Monday letter to investors obtained by Pensions & Investments.

Mr. Burbank said in the letter that he is rethinking how to manage money and is "willing to narrow my focus as much as necessary in order to boost our returns and your confidence in our process."

Total firmwide assets under management were $800 million as of Nov. 30. The Passport Global Fund accounts for $180 million of that total AUM.

Passport Capital's most recent Securities and Exchange Commission ADV filing showed firmwide assets as of Jan. 31 of $2.6 billion compared to $3.9 billion as of June 30, 2016, as reported to P&I by the company.

Passport's investment staff will continue to manage other existing hedge funds, including the Passport Special Opportunities Fund, Mr. Burbank told the firm's clients, adding "my only professional drive is to make strong returns and I will proceed regardless of the capitalization of these funds by others. You will not hear about Passport shutting down — there is too much opportunity available to do that."