John W. Henry To Return Outside Capital

Nov 9 2012 | 7:18pm ET

Commodities-trading legend John Henry is the latest hedge fund manager to throw in the towel, telling clients today that he would stop managing outside capital.

Henry's Boca Raton, Fla.-based John W. Henry & Co. said it "has determined to cease managing client assets effective Dec. 31, 2012." It offered few other details, other than to assure, "JWH will continue to engage in proprietary trading and research."

Once one of the largest and best-performing commodity trading advisers, JWH has seen both its assets and returns suffer in recent years. From some $2.5 billion six years ago, the firm now manages less than $100 million. In 2007, Merrill Lynch pulled about $600 million, more than half of the money JWH managed at the time.

The firm has been in business since 1982.

"The firm has been small since 2007 and once assets fell below $100 million this year the company became too small to sustain itself," Henry, who hasn't actively traded at the firm in recent years and who has become better-known as the primary owner of baseball's Boston Red Sox and English soccer's Liverpool Football Club, wrote to investors. "We have been returning assets to investors with a  desire to exit the client business by year end."

The firm's marketing manager, Amy Hanson, told clients that it "will not be providing performance information going forward."

JWH's five trading programs are down between 1% and 21% this year.

Henry told the Boston Globe that he hasn't "run the company since 1989;" instead, JWH relied on "a mathematical approach and a philosophy that hasn't changed." JWH will continue to manage Henry's own money, and he said he will not sell his majority stake in either the Red Sox, who suffered their worst season in decades this year, or Liverpool.

Henry is only the latest prominent hedge fund manager to retire or return outside capital in recent years, joining the likes of George Soros, Carl Icahn, Caxton Associates' Bruce Kovner, Centaurus Capital's John Arnold, Duquense Capital Management's Stanley Druckenmiller and Farallon Capital Management's Thomas Steyer.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.