Hedge fund Highfields to shut down, founder says in client letter

By Svea Herbst-Bayliss

BOSTON (Reuters) – Hedge fund Highfields Capital Management is shutting down amid a period of lackluster returns and as its founder said he needs a change after two decades of trading stocks for prominent clients including Harvard University.

Jonathan Jacobson told investors on Wednesday that he plans to convert the roughly $12 billion Boston-based firm into a family office and acknowledged that results in the “last few years” have fallen short of his expectations.

He will be returning roughly $10 billion to clients.

The move marks one of the biggest hedge fund closings in recent months coming as industry returns have been disappointing and clients have generally chafed at paying hedge funds’ traditionally high fees.

The Wall Street Journal first reported the news.

“After three-and-a-half decades of sitting in front of a screen, I realized I am ready for a change,” Jacobson wrote in a letter to clients which was seen by Reuters.

Writing in what he said was his 80th letter to investors, Jacobson added that the fund lost a little over 1 percent last month and that the funds are “down slightly more than that for the year.”

Longer term, Highfields returns are excellent, Jacobson wrote, saying that clients who invested one dollar when the fund opened 20 years ago would have seen that grow to seven today.

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