(Bloomberg) -- Anthony Scaramucci effectively barred clients from exiting SkyBridge Capital’s crypto-focused hedge fund, even though returns have jumped.

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Investors who own about 70% of the fund’s shares asked for their money back in the latest redemption period that ended in March, according to a regulatory filing. The fund — which returns money through a tender offer — bought back roughly 7% of those shares.

Scaramucci, 60, declined to comment, but he previously said the fund lets him limit redemptions and that he’s “operating inside the ambit of the prospectus.”

SkyBridge began curtailing withdrawals two years ago amid the so-called crypto winter, when the fund posted large losses and investors sought to flee.

Cryptocurrencies have rebounded since.

Bitcoin soared roughly 150% in the 12 months ended March 31, and the SkyBridge fund gained 46.4%. Yet many clients want the Mooch, as the firm’s founder is known, to stop holding their cash captive.

Morgan Stanley’s private wealth clients account for about 70% of the fund’s $1.6 billion, and the bank has been trying to get them out for more than a year, according to people familiar with the efforts.

A spokesperson for the bank declined to comment.

Gating Investors

Hedge funds usually only curb redemptions — a practice known as gating — when they’re holding hard-to-sell investments and redemptions would disadvantage remaining investors. Others curb redemptions amid poor performance as a way to hold onto capital.

SkyBridge Co-Chief Investment Officer Brett Messing gated investors at his earlier fund, GPS Partners, after it dropped almost 15% in January 2008. Fewer than a fifth of its clients asked to pull their money.

At SkyBridge, recent strong performance — including a 26% jump in the first quarter — has barely erased previous losses. In the five years ended March 31, it posted annualized returns of less than 1%.

The firm managed a total of about $2 billion as of year-end, down from a $9 billion peak in 2015.

Its founder is perhaps most famous for being then-President Donald Trump’s communications director for 11 days in July 2017 until he was fired after an expletive-filled interview with the New Yorker. Scaramucci also founded the SkyBridge Alternatives hedge fund conference, known as SALT.

SkyBridge was previously known for investing in other hedge fund managers such as Steve Cohen, Dan Loeb and Izzy Englander. While it still has some of these investments, it began pivoting to crypto beginning in 2020.

At the end of the first quarter, the fund had 57% of cryptocurrency and digital assets, 21% in multistrategy funds, 7% in equity funds and 15% in structured credit funds, according to a filing.

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