Fund affiliated with Nick Schorsch and late Aubrey McClendon is paying back investors

Investors in a fund affiliated with Aubrey McClendon’s American Energy Partners LP and real-estate investor Nicholas Schorsch will be fully repaid over the next five months after it failed to get off the ground, according to a source with knowledge of the matter.

The fund, which raised about $11 million of the $2 billion it was targeting from mom and pop investors to buy and develop oil and gas properties, returned half of the contributions by Feb. 1, said the source, who declined to be identified. Investors will receive repayments for the remaining 50% within 180 days of Feb. 1, the source said.

Mr. McClendon died Wednesday in a car crash following charges of conspiring to rig the price of oil and gas leases prior to founding American Energy Partners in 2013. The Oklahoma City-based company had a management and operating services agreement with the fund, which struggled to attract investors amid a commodities slump that has pummeled many oil and gas producers.

The fund, which was sponsored by Schorsch’s American Realty Capital, recently renamed AR Global, won’t claw back any dividends that investors collected from their contributions, while brokers will keep the commissions they received for attracting money to the fund, according to the source.

Calls to American Energy Partners went unreturned. Matthew Furbish, a spokesman for AR Global, declined to comment.

The American Energy Capital Partners fund had planned an annual distribution rate of 6% for its investors, according to the original fund prospectus filed with the Securities and Exchange Commission in December 2013. The fund first opened to investors in May 2014, and drew in its first contributions the following month, the source said.

Broker-dealers received 7% sales commission for attracting money to the fund, the prospectus shows. Plus, there was a 3% dealer manager fee.

American Energy Partners, which is backed by private-equity firms Energy and Minerals Group and First Reserve Corp., said Thursday that its employees are “deeply saddened” by Mr. McClendon’s death and that it will continue doing business as an oil and gas company.

Mr. McClendon, who previously served as chief executive officer of Chesapeake Energy Corp., said in a March 1 statement that the antitrust conspiracy charges against him were wrong and unprecedented.

Mr. McClendon was charged by a federal grand jury with conspiring to rig bids for the purchase of oil and natural gas leases in northwest Oklahoma from December 2007 to March 2012, according to a March 1 statement by the Department of Justice.