Citadel LLC and Point72 Asset Management are investing $2.75 billion into hedge fund Melvin Capital Management, which has been hard struck by a series of short bets to start the year. 

The influx of cash is estimated to support stabilizing Melvin, which in 2021 has lost 30% through Friday, said people familiar with the firm. Melvin started the year with $12.5 billion and had been one of the best performing hedge funds on Wall Street in recent years. The losses stem from Melvin’s array of short belts against companies and have dazed clients and other traders. Among other short positions, Melvin bet against the soaring stock of video game retailer GameStop Corp. 

Citadel and its partners are investing $2 billion and Point72, which already had more than $1 billion invested in Melvin as of 2019, $750 million. The investments are in Melvin’s fund and include non-controlling revenue shares in the firm. Melvin founder Gabe Plotkin was an elite portfolio manager at Point72’s predecessor firm, SAC Capital Management, before he left to start Melvin.

It couldn’t be determined how much of a revenue share Citadel and Point72 would acquire.