By Svea Herbst-Bayliss

(Reuters) –Melvin Capital (the hedge fund that suffered a loss of nearly $7 billion last year after betting on stocks such as GameStop (NYSE)) to tumble), is seeking to raise funds for a new portfolio. This was according to a Monday regulatory filing.

Melvin Capital Long Only LP will name the new fund. The filing didn’t specify when it would begin fundraising. Its name implies that it will place bets on stocks rising and falling, but that no hedge will be used.

An official for the company declined to comment.

Gabriel Plotkin (Melvin’s founder), is launching the new site at an important time. He had been a Wall Street trader of distinction before retail investors attacked Melvin last year and inflicted severe losses.

Plotkin lost 39% of his 2021 investment. He is now trying to regain investors’ trust, but without using a strategy Wall Street believed he was particularly good at: selling short stocks.

Max Gokhman is the chief investment officer of Alpha TrAI hedge fund. He stated, “Launching an hedge fund strategy (that doesn’t) appear to be hedge” It is likely that markets will become turbulent, and it will require “nimbleness” to strategically go long or short to maximise alpha as well as minimize risk.

Melvin, along with other hedge funds, has already been hurt by market fears, including rising interest rates, geopolitical turmoil, and Russia-Ukraine tensions. According to an insider familiar with Melvin’s losses, Melvin suffered a 17% loss in January’s first three weeks.

This sharp decline mirrors Melvin’s January performance when Melvin lost approximately 54%. The fund was unable to erase the losses by the end of the year.

Plotkin was betting that GameStop’s share prices would fall as people shift away from this brick and mortar video retailer.

Melvin, along with others, suffered because retail investors came together and supported the stock. The stock surged over 2,500% to January 2021. Plotkin had already closed his short position at GameStop by the end January

The losses he attempted to erase took away from his records, where he had averaged 30% per year gains between 2014-2020.

Plotkin’s creation of a new hedge fund is causing investors to be concerned. He might lose the ability to short the market, which allows them to make promises to clients that they will ride out the downturn.

Investors worry that it will be difficult to raise cash to fund with poor records. However, managers are alerted by investors that they might wish to switch cash from technology-oriented funds to ones that invest in forgotten or less costly stocks.