The board of Liongate Capital Management plans to return assets to investors after losing clients and managing less capital.

The reduction in assets under management placed the business under “significant pressure," Principal Financial Group Inc., the majority owner of the hedge fund, said in an e-mail on Friday to Bloomberg News. Clients and employees have been informed, according to the statement.

The closure is a setback for Principal Financial, the Des Moines, Iowa-based life insurer that has been expanding beyond the U.S. and building asset-management operations to boost fee income. Principal Financial bought 55 percent of Liongate for $44 million in 2013, when the hedge fund managed $1.4 billion, and wrote down the value of the investment a year later.

A spokesman for Principal Financial declined to comment on the value of assets currently managed by Liongate.

The Wall Street Journal reported Liongate’s decision earlier on Friday.