John Arnold, one of the most successful commodity hedge fund managers of all time, will shut his Centaurus Capital after a remarkable decade.
Arnold told clients of his Centaurus Energy Master Fund yesterday that he would liquidate its holdings and return their capital. The 37-year-old said he planned to “pursue other interests.”
Arnold founded Houston-based Centaurus in 2002 after leaving a collapsing Enron Corp. His decision follows that last month by fellow energy hedge fund BlueGold Capital Management, which announced that it would liquidate.
Unlike BlueGold, nursing a 34% loss from last year, Centaurus was not weighed down by past losses. The firm suffered only one annual loss, a 4% decline in 2010, and returned 10% last year. But the firm is dealing with one of the most difficult natural gas markets in recent memory.
“In the past 10 years, we have achieved more success than I could have hoped for or imagined,” Arnold wrote. “We achieved outstanding returns for our investors—often in the triple digits—while having the discipline and rigor to stay true to our core investment focus.”
Centaurus manages a total of $4 billion, $2 billion of which is in the Master Fund. The firm returned $1 billion to investors last year as opportunities evaporated.
“I am immensely proud of what we created,” Arnold wrote. “However, after 17 years as an energy trader, I feel that it is time to pursue other interests.”
News of Arnold’s retirement sent natural gas futures down 5% yesterday.