Recent and major departures from the hedge fund kingdom – Stanley Druckenmiller, Paolo Pelligrini, Richard Grubman and Lou Simpson – signal a trend of investors retiring at a time when hedge funds show the worst results in recent memory.The wave started with Druckenmiller, who was down for the first time in years and it just wasn’t fun anymore. Then there was Pelligrini, also down, who said he fundamentally disagrees with the government’s economic policies.
And since many in the community can 1. sympathize with their reasons for retirement, and 2. have already checked a ridiculous amount of accomplishment off their bucket list, we think there’s good reason to expect another retiree or two.
Fund: Berkshire Hathaway
Why he might retire: Three reasons. He just turned 80, Doug Kass told CNBC he thinks the Oracle of Omaha will announce an in-house successor at the 2012 AGM, and in 2006 Buffett told investors he has a succession plan in place, Li Lu and David Sokol.
Why he might not: He told NYU students he wanted to work past 100.
Fund: Icahn & Co.
Why he might retire: His legacy is sure - Gordon Gekko is 1/2 based on him. Plus, he's 74.
Why he might not: When TIME asked Icahn about retirement when he turned 71, he replied: 'A number of CEOs have offered to host my retirement party. But I'm just a competitive guy that grew up in Queens. I can't see myself spending the rest of my life in Florida playing golf.'
Fund: BP Capital Management
Why he might retire: He's got a lot of work to do on his beloved Pickens Plan to reduce oil imports. In his newest version, which depends almost entirely on natural gas, he eliminates discussion of wind turbines (one of the focal points of past versions).
Why he might not: When asked by NPR in '06 about the oil industry changing by the time he steps down, Pickens answered: 'Well, I won't retire, so that's out.'
Fund: Soros Fund Management
Why he might retire: He's the guy who 'broke the British Pound.' If he retires now, he still will be.
Why he might not: Soros has already retired once, when he withdrew from active management of his firm in 2001. He must not have enjoyed it. He came out of retirement to protect his fund as the economy collapsed in 2008. So until things start to look up, Soros could be standing guard.
Fund: Edward O. Thorp & Associates
Why he might retire: He's coming off a high point, making some very nice returns on the sub-prime disaster, while most quants lost big. Plus, his legacy is already in place: the man is credited with working out how to beat the casino in blackjack, and he's 78-years old.
Why he might not: Thorp has already retired once. No one likes a Favre.
Fund: SAC Capital Management
Why he might retire: In June, Cohen told Vanity Fair he is 'just about ready to retire from full-time trading, while he's ahead.' Also, his investors want more transparency, which they feel he isn't giving, suggesting he doesn't want to and is annoyed by their inquiries.
Why he might not: SAC has averaged 30% annual returns for 18 years and had only one negative year (in '08). He works on the trading floor with his traders, apparently has an uncanny ability to 'read the tape,' and from what we can see on his desk (we think it's one of these two), it seems like his job is his life. Also, he might have found a way to compromise with the investors demanding more control. Recently he started playing golf with them. Also, he's only 54.
Fund: Axiom Capital Management
Why he might retire: Conjecturing on Bloomberg about the retirement of Druckenmiller and Pelligrini, Dalton responded thoughtfully, almost like he's speaking from experience:
'I think it just happens to be that they decided that it was time to go to the beach, so to speak. On the other hand, there is no doubt that a lot of the market conditions we're confronted with now are not particularly well suited to a wide swath of the hedge fund industry. You know, the equity world is faced with a market that is having very, very wide swings in price action. It's a long-biased industry, let's face it. Results have been rather anemic.'
Why he might not: Because he doesn't seem as down on the market and government as everyone else. Read his interview with Bloomberg. He thinks the government will continue to do everything they can to support the economic recovery.
Fund: Moore Capital Mgmt.
Why he might retire: His fund 'had a particularly painful May,' his worst month ever, with the flagship fund dropping 9.15 %. Also, he's been buying properties in preparation for retirement. He has homes in Colorado, the Bahamas, Long Island (the estate includes a hunting lodge), Scotland, three private polo grounds and a plantation in North Carolina.
Why he might not: He's young (54). He might stick around for a few more years.
Why he might retire: Dalio runs the second biggest hedge fund in the world, he's worth $4 billion, and he's 60. A few months ago, it looked like a good chunk of his time was spent giving interviews and writing out explanations about his Principles.
Also, we didn't even have to photo-shop this picture of him in a retirement setting. Is anyone on this list screaming 'I want to retire!' louder than Dalio?
Why he might not retire: There are two more years until Dalio is 62, the classic retirement age. He might hold out until then or a little longer.