August 28, 2013 / 11:08 PM / 7 years ago

Hedge fund Karsch Capital to shut down after 13 years: letter

BOSTON (Reuters) - Hedge fund manager Michael Karsch is shutting down his 13-year-old firm, Karsch Capital Management, in order to “think about the next chapter” of his career.

“I have decided to return capital to investors at the end of the third quarter,” Karsch wrote to investors on Wednesday, according to a letter seen by Reuters.

Karsch, whose biggest investments include Yahoo Inc YHOO.O and Expedia (EXPE.O), said that 95 percent of the fund’s $1.8 billion in assets would be returned to investors by the end of next month while the last 5 percent would be returned in January after the fund’s audit.

Looking back over his fund’s run, the 45-year-old manager said “it is time for me to take a step back, reflect on my experiences and begin to think about the next chapter of my career.”

Karsch Capital’s main fund was up 6.1 percent this year through the middle of August. In the letter, Karsch said that over the life of the fund it outperformed the Standard & Poor’s 500 index by approximately 100 percentage points with one-third of the volatility.

While Karsch, who previously worked at Soros Fund Management, did not tip his hand as to what he may do next, he said that he is “very excited about the opportunities that lie ahead.”

A spokesman declined to comment.

News of Karsch’s decision comes almost exactly three years after Stanley Druckenmiller, who established his reputation as one of the industry’s best managers for betting against the British pound while he worked at Soros Fund Management, announced his retirement at age 57. Since then a number of other managers, including Chris Shumway, have also shut down their firms.

Reporting by Svea Herbst-Bayliss; Editing by Phil Berlowitz

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