U.S. Markets

Hedge fund Tudor shuts one portfolio; Jones to play bigger role

BOSTON (Reuters) - Paul Tudor Jones, one of Wall Street’s most prominent investors, is restructuring his Tudor Investment Corp. by liquidating one portfolio and planning to play a bigger role in managing money at the hedge fund firm he founded nearly four decades ago.

FILE PHOTO - Paul Tudor Jones, founder and chief investment officer of Tudor Investment Corporation, speaks at the Sohn Investment Conference in New York, May 5, 2014. REUTERS/Eduardo Munoz

Jones told investors he was shuttering the five-year-old Tudor Discretionary Macro funds and that Andrew Bound and Aadarsh Malde, the portfolio’s co-chief investment officers, would be leaving.

The portfolio returned an average 3.5 percent a year during its lifetime, far below the average 17 percent a year return of the firm’s 31-year old flagship Tudor BVI Global Funds.

“It has been a frustrating several years for macro trading and for me especially,” the 63-year old billionaire wrote to investors in a Nov. 30 letter seen by Reuters on Friday. “But I believe the environment is on the verge of a significant change.”

Jones’ decision to shutter the portfolio was first reported by Bloomberg.

The move comes as some prominent hedge funds have struggled in the face of poor returns and investor redemptions. On Thursday, Neil Chriss announced plans to shut Hutchin Hill Capital and earlier in the year Eric Mindich closed Eton Park.

Clients who had money with the Tudor Discretionary Macro (TDM) Funds will be allowed to shift it into the Tudor BVI Global Funds. Jones, who started his career trading cotton futures, was not involved directly in investing money at the TDM funds but has always played a key role in managing assets at the BVI portfolio.

Now he will play an even bigger role at the $7 billion firm. “I will be the largest risk taker,” Jones wrote adding, “this means that my results will have a one-for-one performance impact on Tudor BVI. I relish this challenge.”

And after several difficult years, Jones said he expects the investing environment to turn around for people like himself who can make money when markets rise and fall.

Jones wrote that 2017, when stock markets have been breaching new milestones with regularity, reminds him of 1999 when markets were also surging. “The termination of that bull market kicked off a three-year macro feast,” Jones wrote, adding “The plot is much the same today but we can substitute Bitcoin and fine art for the Nasdaq 100 of 1999.”

Editing by Bernadette Baum