Vinik to close £3bn hedge fund

Jeff Vinik, the former star US fund manager, yesterday stunned the hedge fund world by announcing that he and his partners are shutting down their $4.2bn (£2.9bn) hedge fund to allow them "more time to focus on their personal lives".

Jeff Vinik, the former star US fund manager, yesterday stunned the hedge fund world by announcing that he and his partners are shutting down their $4.2bn (£2.9bn) hedge fund to allow them "more time to focus on their personal lives".

In a letter to investors, Mr Vinik, 41, stressed that his decision had nothing to do with any perceived lack of investment opportunities and was motivated by personal considerations.

It follows one of the best years for the fund since it was set up by Mr Vinik with his partners, Mike Gordon and Mark Hostetter, four years ago.

"The decision to return money should not be interpreted as our being particularly bearish [or particularly bullish] on the months ahead," he wrote. "We believe money making opportunities in the market will continue just as they have over the past four years. Simply put, returning investors funds will enable us to rebalance our time, spending more time with our family."

Vinik Asset Management, based in Boston, returned 57 per cent in the year to 20 October, bucking a downward trend. This year has already seen the retirement of Julian Robertson, manager of the legendary Tiger Fund, while George Soroshad to cut back the size of his Quantum Fund sharply after several poor market calls.

Mr Vinik said he and his partners would continue managing a smaller pool of funds on behalf of themselves and their families. He has three children aged between six and 10 and his wife is pregnant.

Mr Vinik set up on his own in 1996 with $800m after falling out with his previous employer Fidelity, where he managed the flagship Magellan Fund. Since then investors have received a seven-fold return on their investments or five-fold after fees.

The retreat of some of the best known US hedge fund managers has coincided with an upsurge of launches of European hedge funds. However, most are backed by big banks rather than being set up by ambitious individual traders as has been the pattern in the US.