(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 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
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)