October 28, 2008 / 8:34 AM / 11 years ago

Investors opting out at BP Capital-source

NEW YORK (Reuters) - Roughly half the investors in T. Boone Pickens’ BP Capital hedge fund have asked to withdraw their money after losses of about 60 percent this year, a source familiar with the situation said on Tuesday.

Founder and Chairman of BP Capital Management T. Boone Pickens participates in a panel discussion during the Clinton Global Initiative in New York September 25, 2008. REUTERS/Chip East

The Texas oil tycoon and his investment fund, which had invested primarily in the energy sector, have lost about $2 billion since peaking in late June, the source said.

The source confirmed that Pickens had moved the fund almost entirely into cash a few weeks ago to allow investors flexibility in riding out the volatility of recent global market turmoil.

“He recognized early enough that others may need their money out for other needs and waived withdrawal requirements,” the source said.

In September, hedge fund managers globally said they were sitting on record levels of cash to meet an unexpected flood of “I want my money back” notices, after losses at the world’s roughly 10,000 loosely regulated funds averaged 5 percent for that month alone.

Chicago-based performance tracking group Hedge Fund Research this month said average 2008 industry losses have totaled 9.41 percent through September, with energy and basic materials hedge funds down 20.84 percent this year.

Sources familiar with BP Capital’s situation said losses at the fund, which began in August 2001, were an aberration due to a worldwide economic collapse.

BP Capital’s losses this year come after five years of gains, with annual returns reaching as high as 119.5 percent in 2003 during the commodities boom that began in 2002.

Pickens, who is also an advocate for alternative energy investment in the United States, has said he will retool and is planning a comeback.

“I’ll get it back,” Pickens said on CBS network program “60 Minutes” on Sunday.

Reporting by Chris Baldwin; Editing by Walter Bagley

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