Friday, 1 August 2014
Last updated 5 hours ago
Jan 31 2014 | 1:07pm ET
Joho Capital Management is going out on a high note.
The New York-based hedge fund's founder, Robert Karr, told investors yesterday that he would close the $5.1 billion Asia-focused fund, returning their money by the end of the quarter. Karr cited the travel necessary to run a firm with offices around the world, as well as the increasingly challenging market environment.
"Since the financial crisis, solid returns have been more challenging, but with a strong 2013, I feel now is the time," Karr, a Tiger Management veteran, wrote. Joho returned 30% last year, and has posted annualized returns of about 20% since its launch in 1996, although it is down about 2.5% this year.
Karr said his decision to liquidate was made with "mixed emotions," but the "draining" travel and his desire to spend more time with his children won out.
"The boys are now two and four years away from leaving home for college and I fully recognize that Suzanne has carried the heavier burden of parenting them," Karr wrote. "Before they leave, I want to spend more time with them."
Karr said he'll also spend more time on his philanthropic efforts focused on educational initiatives for underprivileged children in New York, and will turn Joho into a family office to manage his own wealth. Some of Joho's 26 staffers will be retained for that effort.
He'll also take a page from his mentor, Tiger founder Julian Robertson, by backing new hedge funds founded by his staffers. Some of his analysts may eventually spin-out their strategies, he said.
Joho's liquidation was first reported by Alpha magazine.
Joho is the second major New York hedge fund to announce its closure this week. On Wednesday, Scout Capital Management founders James Crichton and Adam Weiss said they would liquidate their $6.7 billion firm and part ways. The two closures are among the largest in the hedge fund industry in recent years.