ETF News

UPDATE 4-Duquesne's Druckenmiller retiring after 30 years

* Duquesne, $12 billion in assets, never had losing year

* Druckenmiller said recent performance ‘disappointing’

* Druckenmiller helped in Soros’ $1 bln bet against pound (Updates with link to related story)

NEW YORK/BOSTON, Aug 18 (Reuters) - Stanley Druckenmiller, the investor best known as a key architect of billionaire investor George Soros’ famous bet against the British pound, is closing his hedge fund firm after 30 years.

In a letter sent to his 100-plus investors on Wednesday, Druckenmiller, the 57-year-old chief executive of $12 billion Duquesne Capital Management, said he was dissatisfied with his recent performance and that running the firm has taken a toll on him both professionally and personally.

“I have had to recognize that competing in the markets over such a long time frame imposes heavy personal costs,” he said. “While the joy of winning for clients is immense, for me the disappointment of each interim drawdown over the years has taken a cumulative toll that I cannot continue to sustain.”

Druckenmiller did not say exactly what he plans to do next but told investors he would be hosting meetings in Pittsburgh and New York in the next weeks to meet with them and answer their questions.

New York-based Duquesne specializes in selecting growth oriented value stocks and has never had a losing year in its 30 years. Druckenmiller, who acquired expertise in making global bets on interest rates and currencies while working at Soros Fund Management, posted an average annual return of 30 percent at his fund for decades.

A spokesman said the fund is off 5 percent this year as the average fund is up 1.52 percent. (See BreakingViews column: [ID:nN18247207])

“While our clients were certainly pleased that we achieved positive results for 2008 and 2009 in a challenging environment, as you may have surmised I was dissatisfied with those results because they did not match my own, internal long-term standard,” Druckenmiller said.

At the end of the second quarter, Druckenmiller's top five positions were Apple AAPL.O, Wells Fargo WFC.N, McDonald's MCD.N, JPMorgan Chase JPM.N and Cisco Systems CSCO.O.


Druckenmiller, who earned an undergraduate degree from Bowdoin College, has amassed one of the most enviable records in the $1.6 trillion hedge fund industry. And in doing so, Druckenmiller has amassed a personal fortune of his own. Forbes magazine, in its 2009 ranking of the richest Americans, estimated his net worth at $3.5 billion.

He got his start in money management soon after college when he quit plans to earn a doctorate and joined a Pittsburgh-based bank as a stock analyst.

But after years of managing other people’s fortunes, Druckenmiller joins a small but growing number of stars who are cutting their careers short.

“I continue to care deeply about performing for our clients, and the stress of performing in a way that I consider to be disappointing -- even if you do not share that view -- persists in exacting a high emotional toll, with the result that I have concluded that this change is necessary,” Druckenmiller told his investors.

Druckenmiller’s most public claim to fame came when as the chief investment officer for industry legend George Soros, he helped engineer a huge bet against the British pound in 1992. It earned the firm $1 billion and helped keep Britain out of Europe’s common currency union.

Ten years ago when Soros reorganized his Quantum Fund and adopted less aggressive investment strategies, Druckenmiller left to concentrate exclusively on running Duquesne, the firm he had founded years earlier.

Druckenmiller’s defensive plays conserved value and cemented his reputation as a star. In 2006, he ranked among the top earners in an industry where managers like Druckenmiller can collect a 20 percent performance fee.

Together with Daniel Benton and Louis Bacon, Druckenmiller quickly became part of the new establishment in hedge funds, taking over from his former boss and other elder industry statesman, Julian Robertson, about a decade ago.

But the following years were difficult for the young stars and the old guard alike as they faced fallout from the bursting of the technology bubble, the introduction of the new European currency, a bear market, and then the subprime mortgage crisis, which in 2008 left the hedge fund industry with its worst ever returns.

Some of the aging young stars bristled at the ceaseless demands their jobs imposed, often keeping them away from young children and scuttling countless family vacations.

Soon some talked about taking more time for themselves.

Two years ago Daniel Benton shut down his firm. Last week Boston-based Highfields Capital co-founder Richard Grubman said he was retiring. (Editing by Leslie Adler, Bernard Orr)