Centaur Galileo, a UK-based sports-betting hedge fund, has folded after losing $2.5 million in investments, the Journal reports.Galileo was structured exactly like a hedge fund, but analysts tried to grow the fund purely by betting on sporting events rather than traditional investing.
Back when the fund launched in 2010, the directors of Galileo told CNBC that they were using high-level software that took five years to develop, and expected to a 15-25% return on investment.
But last week investors got a letter saying the fund was being liquidated and all the money was gone.
On paper, this seems like it should have worked (Mark Cuban even endorsed the idea in 2004). Plenty of professional gamblers make their living handicapping sports and finding value in point spreads. And with all sorts of cash and technology at its disposal, you’d think a fund like this could generate some decent returns.
So what went wrong?
According to the Journal, the fund told investors that they lost it all due to “sheer bad luck.”
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