For New York’s Atticus Capital and London’s Children's Investment Fund, enough is enough. Realizing their investments in Deutsche Börse have literally halved this year, they’re on a mission to recoup their losses (and maybe even squeeze out some much-hoped-for gains). Two years ago, the funds grabbed headlines in their bid to replace the exchange company’s CEO. But that was just softball compared to what they’re going to do now.

Two large hedge funds that made headlines pushing Deutsche Börse AG to replace its chief executive several years ago are teaming up to seek changes that could include breaking up the German exchange operator.

London-based The Children's Investment Fund LLP, known as TCI, and Atticus Capital LP of New York are trying to salvage their investments in the company, which have fallen by half this year as shares of exchanges have fallen. Together, the large activist funds hold about 19% of the voting rights in the exchange, they said in a statement Tuesday.

The TCI fund, founded by manager Christopher Hohn, is down 11% year to date, a far cry from its average annual returns of more than 30% in the five years since inception. Tim Barakett's Atticus Capital has seen its two largest funds fall 32.9% and 25% this year through August.

Atticus had about $14 billion in assets as of the end of July, having lost about $5 billion this year. TCI had about $15 billion under management as of mid-June; it takes its name from the children's charity into which a portion of its profits are directed.

Their losses underscore the difficult year for many so-called event-driven funds amid the volatile stock markets and as financial turmoil curtails the takeover activity that can generate big returns.

Mr. Hohn has long pushed for a breakup of Deutsche Börse, which has three main businesses: its Eurex derivatives arm; a share-trading platform called Xetra; and Clearstream, which handles post-trade processing. In particular, the funds could seek to force a sale of Clearstream, which they see as separate from the exchange business, and could put off a potential acquirer of Deutsche Börse, according to a person familiar with the matter.

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