REUTERS/Dado Ruvic A competitor takes part in the first international waterfall jumping competition held in the old town of Jajce August 9, 2014. 
Claren Road Asset Management, the long-short credit hedge fund backed by private equity giant Carlyle Group, was turning money away a year ago.
Now its assets under management are plummeting.
Bloomberg News' Simone Foxman and Saijel Kishan report that investors asked to pull $1.97 billion from the fund in the last round redemption round.
That is equivalent to around 48% of the fund's remaining $4.1 billion in assets.
The fund will manage approximately $2.1 billion in assets from October 1.
The fund's assets under management hit a peak of $8.5 billion in September 2014, according to the Bloomberg report, but since then have been hit with a series of redemptions after suffering heavy losses on bets on Fannie Mae and Freddie Mac last October.
Claren Road was founded in 2005 by four former traders from Citigroup's credit trading unit-Brian Riano, John Eckerson, Sean Fahey and Albert Marino. Carlyle acquired a 55 percent stake in the fund in 2010. Last year was the fund's first down year.
Carlyle's co-CEO Bill Conway said during the second quarter earnings call that Claren Road had turned down $1 billion a year ago "because they just didn't feel that they had the market conditions or the right opportunities to put that money to work."
The fund had had a "tough time" since then, he said.
"But they do have a long track record of strong risk adjusted returns, very proven team that's [done] the job, same people that were there when we initially acquired 55% of the business. We're working closely with them to sustain and restore the confidence that their investors have had with them for more than a decade."
This isn't the first Carlyle Group-backed fund to take a hit recently. Vermillion, a commodity hedge fund backed by Carlyle, has seen its flagship fund's assets fall from nearly $2 billion to less $50 million, The Wall Street Journal reported last month.
A spokesperson for Claren Road declined to comment.