Thursday, 24 July 2014
Last updated 22 min ago
May 6 2013 | 3:14pm ET
Vinik Asset Management will close its doors after 17 years following a period of underperformance and massive redemptions.
Firm founder Jeffrey Vinik told clients Wednesday that the $6 billion firm will return all assets by the end of June. The move comes just a month after reports that Boston-based Vinik AM had suffered $1.5 billion in redemptions—but also that it planned to raise additional money.
Vinik AM's demise comes about 10 months after Vinik restructured the firm, consolidating its funds and hiring a new investment team, with Vinik himself becoming chief investment officer. Those moves, coupled with Vinik's move from Boston to Tampa, Fla., where he owns hockey's Tampa Bay Lightning, spooked investors, who feared he was stepping back from the firm.
Those fears have now been confirmed, with Vinik writing that he plans to focus his attention on the team, his philanthropy and his family.
"After a great deal of consideration, we have made the difficult decision to return our investors' funds," Vinik, who made his name as the manager of Fidelity Investments' Magellan Fund, wrote.
"While we are very proud of our excellent long-term record of 17% annualized returns since we started VAM in 1996, the last 10 months have been more difficult following our restructuring," Vinik continued. "It is time for us to take a break."
Vinik AM Is down 4.8% over the past 10 months, having stepped back from the stock market in advance of its major rally and having suffered losses on gold-mining shares, which make up 14% of its portfolio. Vinik said the firm would "work tirelessly" to maximize returns while it liquidates its investments.
"The liquidity of our portfolio has improved dramatically" in recent weeks, Vinik noted.
Vinik said that his firm would spawn at least two new hedge funds: Portfolio managers Doug Gordon, Jon Hilsabeck and Don Jabro will launch a Boston-based long/short equity hedge fund, while David Iben, who joined Vinik AM in June as head of the new value group, will launch a hedge fund of his own, in Tampa. Gerry Coughlin, another new face brought on during the restructuring, will launch a hedge fund services firm. Co-founders Michael Gordon and Mark Hostetter, like Vinik, plan to step away from asset management.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…