Reid, who was valued at $200 million back in 2007, has seen his fortune slump to just over $30 million in the years following the financial crisis as the value of his company, Everest Financial, plunged.
A string of incidents have plagued the company, including the collapse of Everest Financial's major shareholder Babcock & Brown, the loss of a key superannuation mandate, board ructions and legal action from a former shareholder, Joe Ross.
Following a strategic review, the company announced that it would wind up its funds and return capital to shareholders.
Reid will step down as CEO but will stay on as a consultant to help manage the wind down parts of the business. The bulk of the wind-down process will be managed by an as-yet unnamed third party.
However, reports suggest the company will not be able to return capital until all outstanding legal matters are resolved.
Reid would not comment on the record yesterday, but the closure of Everest Financial will no doubt come as a blow to the 33-year-old, who was considered a rising star of Australia's finance sector just a few years ago.
While there are clearly a number of reasons for the decision to wind the company down, the beginning of the end occurred when Babcock & Brown collapsed and was forced to sell its 30% stake.
This allowed a number of activist shareholders to come onto the company's register and meant Reid's control of the hedge fund manager was greatly reduced.
Despite the wind-down, Reid is expected to remain in the hedge fund sector and re-emerge with a new vehicle in the future.
However, it remains to be seen whether he will use a public company structure second time around.
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