The most likely reason for the collapse of Centaur was market capacity, with too much fund money being traded in a market such that the fund became the market and eroded the fund's edge.
As I have repeatedly said on this website and in Betfair Trading Techniques, too many novice traders have some initial success, usually through variance (luck) and then run a compounding spreadsheet to forecast their future wealth.
The upshot of the erroneous compounding exercise is that the novice imagines they will soon be a millionaire. In reality, the size of the novice's trades will have to increase such that there will not be enough money on the other side of the spread to match the novice's trades.
A trader must always take into consideration the amount of money they can match against the edge they have found. Put too much money into the market and you can easily end up trading against yourself if the spread moves against your edge.
Pyckio is a tipster aggregation website and such websites can inadvertently (or otherwise) become the victims of survivorship bias. Joseph Buchdahl in Squares & Sharps, Suckers & Sharks has performed extensive research on tipsters and tipster aggregation websites, revealing that most winning tipsters are merely lucky and some aggregators are fraudulent.
Assuming Pyckio is reputable, and there is no reason to doubt that if Buchdahl advertises Pyckio's fund without query (Buchdahl is actually a partner at Pyckio), then any attempt at creating a fund using winning tipsters will run into two problems.
The first problem relates to edge. If tipsters are lucky then they will mean revert and anyone investing in the fund will see their capital gains eroded by the loss. Any fund administration charges will further erode the fund such that investors will lose money in the long run.
The second problem relates to market capacity in that every winner needs a loser to compensate them. Pyckio will be limited to how much money it can put into a market by the amount of losing trades that are entered into the market.
A sports betting market is in no way comparable to a financial market. A single betting market might see a few million pounds changing hands. Compare that to the trillions in financial trading. There is much more capacity for a financial hedge fund to manoeuvre within.
If Pyckio is successful in its enterprise then it will become the victim of that success. Why bother betting or trading when you can get a handsome return from Pyckio's fund? The more people that join Pyckio's fund the less edge it will have over the market because there will be fewer losers.
Losing traders will join Pyckio's fund and will no longer be losers. You cannot have a market where 100% of participants are winners and so Pyckio's edge will dwindle. This means that Pyckio will have to limit the number of people that join the fund and fund members will have to pay a premium for that exclusivity. Again, eroding any edge a fund member may think they have.
Pyckio are walking on a tight rope with this venture. I wish Pyckio well with their fund but more so anyone investing in such a fund.