(Please note language in paragraph 6)
* Highfields Capital co-founder Grubman to retire
* Co-founder Jacobson to stay and run firm
* Move follows cancer diagnosis for Grubman's wife
BOSTON, Aug 13 (Reuters) - Hedge fund manager Richard Grubman, who co-founded Highfields Capital and was one of the first investors to dig into Enron's accounting practices months before the company collapsed, is retiring from the firm.
Grubman, 48, told colleagues and investors that he plans to exit the Boston-based firm over the next months in order to focus more on personal matters, a spokeswoman said. Grubman's wife was diagnosed with breast cancer in 2009.
Jonathon Jacobson, who co-founded the hedge fund firm with Grubman in 1998, will remain its chief executive and chief investment officer, the team told their investors.
Since founding the firm, Highfields has returned an average 12.5 percent per year, a person familiar with the numbers said.
With $10 billion in assets, Grubman and Jacobson run one of the $1.6 trillion hedge fund industry's biggest firms, but they tend to keep a low profile in investment circles.
Of the pair, Jacobson was better known for having worked for the firm that invests Harvard University's multi-billion endowment and then for having been asked to invest a chunk of that money at Highfields.
But in 2001, Grubman unwittingly became known among analysts and investors for a testy exchange with Enron's CEO Jeffrey Skilling. Skilling called Grubman an "asshole" after the hedge fund manager grumbled about Enron's inability to deliver a balance sheet or cash flow statement after earnings.
The bet against Enron, which filed for bankruptcy a few months after the exchange with Grubman, paid off big for Highfields as did a bet on credit markets in 2009. More recent big bets include Jacobson's call that college-loan company Sallie Mae SLM.N is inexpensive. (Reporting by Svea Herbst-Bayliss; Editing by Derek Caney)