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Jacob Wolinsky
Jacob Wolinsky
Articles  | Author's Website |

Guru Bruce Kovner Retires

Bloomberg has an interesting article about guru Bruce Kovner. Kovner is retiring from running his $10 billion hedge fund, Caxton Associates LP. Bruce Kovner ran the fund for close to 30 years, during which time the fund produced returns twice as much as the S&P500 returned. The article also mentions gurus Stanley Druckenmiller and George Soros.

Below are the top ten holdings in Bruce Kovner's fund:

Company Industry Shares Value ($1000) % Weighting as of

Citigroup Inc. Banks 1,458,554 60,734 2.2765%
VIVUS Inc. Health Care Equipment & Services 3,939,626 32,069 1.202%
Constellation Energy Grp. Electricity 528,366 20,057 0.7518%
NetApp Inc. Technology Hardware & Equipment 372,911 19,682 0.7377%
Suncor Energy Inc. Oil & Gas Producers 499,788 19,542 0.7325%
Baidu Inc. ADS Software & Computer Services 132,710 18,597 0.6971%
McKesson Corp. Retail 217,554 18,198 0.6821%
Valero Energy Corp. Oil & Gas Producers 670,494 17,145 0.6426%
Marathon Oil Corp. Oil & Gas Producers 325,032 17,123 0.6418%
Newmont Mining Corp. Basic Resources 307,790 16,611 0.6226%
Anadarko Petroleum Corp. Oil & Gas Producers 216,237 16,598 0.6221%

As can be seen from above, Kovner's portfolio is quite diversified:

A brief excerpt from the article:

Bruce Kovner, the billionaire co-founder of Caxton Associates LP, is retiring from the $10 billion hedge fund, ending a three-decade run during which he traded everything from soybeans to Japanese yen futures and returned twice as much as the Standard & Poor’s 500 Index.

Andrew Law, chief investment officer, will take over from Kovner as chairman and chief executive officer on Jan. 1, the New York-based firm said today in a letter to investors. Peter D’Angelo, 64, Caxton’s president and co-founder, will retire.

“After 34 years in the trading business and more than 28 years leading Caxton, the time has come to hand the leadership of the company to a new generation,” Kovner, 66, wrote in the letter. “I do so knowing that I will miss the adrenalin rush of confronting markets every day but also confident that new leadership will carry on the traditions, style and substance of Caxton’s successful history.”

Kovner is attempting a rare handover of power in the $2 trillion hedge-fund industry, where some of the most successful managers, includingStanley Druckenmiller and George Soros, chose to transform their firms into family offices rather than put another trader in charge. A family office usually oversees money for a wealthy individual and their relatives.

“In a lot of cases, the founder is the firm,” said Brad Alford, head of Alpha Capital Management LLC in Atlanta, who has invested in hedge funds for two decades. “All these guys say they have deep benches, but the founders are the glue that keeps these places together.”

Macro Pioneer

Kovner declined to comment beyond the letter. He has been preparing for his exit since 2008, when he named Law, a 45-year- old former Goldman Sachs Group Inc. managing director, as CIO.

A one-time college instructor and New York City cab driver, Kovner opened Caxton in 1983, one of the first hedge-fund managers who sought to profit from macroeconomic trends by trading a variety of assets, including stock indexes, bonds, currencies and commodities. Among the best-known managers, only Druckenmiller, who turned his Duquesne Capital Management LLC into a family office in August 2010, and Soros, who followed suit this July with his New York-based Soros Fund Management LLC, had longer tenures at the helm of a macro fund.

Link to the full article: http://www.bloomberg.com/news/2011-09-13/kovner-retiring-after-28-years-running-caxton.html

Bruce's letter to shareholders' announcing his retirement:

Bruce Kovner's letter to investors

About the author:

Jacob Wolinsky
My investment ideas have been inspired by many of value investors including Benjamin Graham, Charles Royce, John Neff, Joel Greenblatt, Peter Lynch, Seth Klarman,Martin Whitman and Bruce Greenwald. .I live with my wife and daughter in Monsey, NY. I can be contacted jacobwolinsky(AT)gmail.com and my blog is www.valuewalk.com

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