Activist hedge fund Marcato Capital Management, backed by Blackstone Group and billionaire William Ackman, is shutting down as assets have shrivelled after two years of poor returns. Richard McGuire, the firms founder and portfolio manager began telling investors of his decision to return outside capital a week before, and that he intended to send the money back quickly because the portfolio was largely in cash at that point, the sources said on condition of anonymity.McGuire had been selling positions over the last months of 2019 to meet redemption requests.The decision marks the end of a nine-year run for one of the hedge fund industrys most celebrated newcomers who launched in 2010 with the backing of Blackstone Group, the worlds biggest hedge fund investor, and Ackman, his former boss at Pershing Square Capital Management. McGuire was the first former partner to leave Ackman, followed by Scott Ferguson, Roy Katzovicz and Paul Hilal, who have all set up their own firms.McGuire over the years pressed companies ranging from DineEquity, now Dine Brands Global, which runs fast food restaurant Applebees, Bank of New York Mellon, auction house Sothebys, to footwear company Deckers Outdoor Corp for changes and won a fiercely contested proxy contest at Buffalo Wild Wings.At its peak, Marcato managed roughly $3 billion in assets, but assets have now shrivelled to a few hundred million, one of the sources said.Returns started to tumble since 2018, leaving the fund with a sizable loss for 2018, an investor said. In 2019, while strong at the start, also ended in the red after some of the firms investments that are vulnerable to the effects of the U.S.-China trade war, like Terex Corp, took a hit. Shrinking assets, while uncomfortable for all investors, are especially problematic for activist investors that push management to make changes ranging from buying back shares to selling off divisions to refreshing their boards.The above information was obtained from the Reuters article of December 22, 2019.

4) As stated in the above article, bankruptcies of such activist hedge funds as Marcato Capital Management are especially problematic. Why is that the case? Can you give an example of another activist hedge fund bankruptcy? [15 marks]