Boston hedge fund Highfields Capital Management is returning billions in client money and converting into a family office, founder Jonathan Jacobson told investors in a letter Wednesday.
The decision to return money to investors would mark one of the largest hedge fund closings in recent history. Jacobson started the $12.1 billion stock-trading firm in 1998 after he left his post trading stocks for Harvard University’s endowment. Harvard was Highfields’ first client. About $9.5 billion of Highfields’ assets are outside client money.
“Done correctly, money management is an all-consuming, 24/7 pursuit… After three-and-a-half decades of sitting in front of a screen, I realized I am ready for a change,” Jacobson, 57, wrote in the letter. “The tell was that I simply could not pull the trigger on making a multi-year commitment to a few potential key hires.”
Jacobson’s decision to return money, which he described as “beyond incredibly difficult,” is the latest closure by a high-profile manager during a tough period for hedge funds. This year through August, stock hedge funds on average returned 2.3% compared with a 10% return for the S&P 500 SPX, +0.07% , including dividends, according to industry research firm HFR. Some firms have lowered their relatively high fees, while other have closed their doors and returned client money.
An expanded version of this report appears on WSJ.com.
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