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.


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