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Stanley Druckenmiller Closes Duquesne Capital, Ends 30 Year Career

Tyler Durden's picture





 

And retail investors hope to have any chance in this market where the big boys can no longer cut it? Good luck.

From Bloomberg:

Aug. 18 (Bloomberg) -- Stanley Druckenmiller, the hedge- fund icon who boasts one of the best long-term trading records and the distinction of having made $1 billion for George Soros by forcing a devaluation of the British pound in 1992, is closing his firm after 30 years.

Druckenmiller, 57, said he was tired of the stress of managing money for others and frustrated by his failure in the past three years to match returns that had averaged 30 percent annually since 1986. His Duquesne Capital Management LLC, which oversees $12 billion and has never had a losing year, is down 5 percent in 2010.

“Managing more than $10 billion seems to challenge my long-term standard” for investment performance, Druckenmiller said in a two-hour interview in his New York office on 57th Street overlooking Central Park. “For 30 years I’ve been responsible for managing client money and it’s been a joy, but at some point I need to move on. Thirty years is enough.”

“While the joy of winning for clients is immense, for me the disappointment of each interim drawdown over the years has taken a cumulative toll that I cannot continue to sustain,” he wrote to his 100 clients today.

Druckenmiller built his reputation making large bets on macroeconomic themes that he spotted before others, a skill he shares with legendary traders including Bruce Kovner, Michael Steinhardt and Soros, the Hungarian-born billionaire and his former boss. The decision to shut Duquesne suggests that in an era in which the biggest hedge funds oversee $30 billion and are adding even more assets, they may no longer be able to routinely outperform conventional funds by wide margins.

Duquesne returned about 11 percent in 2008, when hedge funds on average lost a record 19 percent, and rose about 10 percent in 2009, when the average gain was 20 percent.

Missed Opportunities

“I felt I missed a lot of opportunities in 2008 and 2009, and a huge move in bonds this year,” he said. In the past three years, his returns have trailed those of the 10 portfolio managers who manage about half of Duquesne’s capital -- a first.

Druckenmiller said he’s been thinking about retiring since he left Soros Fund Management LLC 10 years ago. He became serious about the idea three or four weeks ago, when Johann Rupert, a friend and chief executive officer of Cie. Financiere Richemont SA, the world’s largest jewelry maker, invited him to play in October at the Alfred Dunhill Links Championship in Scotland, a golf tournament in which both professionals and amateurs compete.

Druckenmiller declined, saying he couldn’t leave the office, given the history of volatile markets in October.

“Are you crazy?” was Rupert’s reply, according to Druckenmiller. “You’ve been doing this for 30 years. You are a billionaire. You can’t take a couple of days off to play golf?”

“I’d had that same thought a hundred times,”

Druckenmiller said. He said almost every family vacation had been interrupted by a work emergency.

Family Office

Druckenmiller will create a family office overseeing some of his fortune, estimated at $2.8 billion by Forbes magazine, when he winds down the firm and returns money to clients sometime in 2011.

“I plan on managing a decent chunk of my money, but only an amount that will be fun,” he said. He will invest with Duquesne portfolio managers who are planning to open their own hedge fund.

More from Bloomberg TV:

 


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Wed, 08/18/2010 - 10:44 | Link to Comment Sudden Debt
Sudden Debt's picture

30 percent annually since 1986

Another PONZI apocalypse about to hit the news anytime soon? I love it when they play out the "Family" card.

Wed, 08/18/2010 - 10:41 | Link to Comment LoneStarHog
LoneStarHog's picture

Mr. Druckenmiller should hire the traders on the Yahoo! boards, as they all have PERFECT (Goldman) trading records, long or short.

Wed, 08/18/2010 - 10:52 | Link to Comment mephisto
mephisto's picture

HF Druckenmiller STOP <Enter>. 

Wed, 08/18/2010 - 10:59 | Link to Comment Sudden Debt
Sudden Debt's picture

Format D:/Cubicle5184HFD

Copy C:/Aziansluts16 D:/Cubicle5184HFD

 

Wed, 08/18/2010 - 10:54 | Link to Comment nonclaim
nonclaim's picture

I want to see the results of retail investor shops like ameritrade, etrade, optionsxpress, etc... I was a very active trader until two years ago and now I don't even bother logging in. Still have two short positions that are in the money but considering close.

Wed, 08/18/2010 - 12:40 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

I am the same boat you are.  I used to make a little extra money each month trading.  It was enough to help supplement my Income.  But, as with you about 2 years ago I had to stop tradeing.  It became more and more difficult to make any money trading.  1/2 th time I was always waiting to "get even".  After a while it does become more and more stressfull and seem to end up not making any Money. 

I also am holding a few stocks under water and will not sell them.   I will either lose it all or they will go up.  Either way my Account is DOA.  No Trading.

Wed, 08/18/2010 - 10:55 | Link to Comment crosey
crosey's picture

Let's check in on what he is doing in 6 months....that's when we'll learn what he really has in mind.

Until then, golf and family works for me!

Wed, 08/18/2010 - 11:01 | Link to Comment quintago
quintago's picture

hide your wife, hide your children, hide your husbands, because they be rapin errybody out here

Wed, 08/18/2010 - 15:24 | Link to Comment rmsnickers
rmsnickers's picture

LMFAO...you can runteldat homeboy.

Wed, 08/18/2010 - 15:41 | Link to Comment NotApplicable
NotApplicable's picture

Boo Hiss to the Junkers! (unaware of the meme, or simply too cool for it?)

Hide your wife and kids indeed!

Wed, 08/18/2010 - 11:02 | Link to Comment benevolous
benevolous's picture

I guess Gary Cohn of Goldman Sachs has made his point.

 

Sorkin reveals an extraordinary telephone conversation between Stanley Druckenmiller, a George Soros acolyte worth $3.5 billion, and Gary Cohn, Goldman’s president. Cohn attempts to persuade Druckenmiller (whom he had long counted as a friend) not to withdraw all his funds from Goldman: “I’m learning who my friends are and who my enemies are, and I’m making lists.” The hedge fund boss shoots back: “It’s my livelihood. I’ve got to protect myself and I don’t really give a shit what you have to say.”

 

http://entertainment.timesonline.co.uk/tol/arts_and_entertainment/books/...

 

 

 

 

 

Wed, 08/18/2010 - 13:18 | Link to Comment DarkAgeAhead
DarkAgeAhead's picture

I generally distrust any guy who uses 3 names, but this is pretty good.

Wed, 08/18/2010 - 15:16 | Link to Comment ToNYC
ToNYC's picture

Dark Age Ahead is three words no matter how you scrunch them. Trust me.

Wed, 08/18/2010 - 16:53 | Link to Comment DarkAgeAhead
DarkAgeAhead's picture

Ha, point taken.  I wouldn't trust me either.

Wed, 08/18/2010 - 11:03 | Link to Comment Trichy
Trichy's picture

Trading is great, it paid for my second pacemaker and my drinking habits that move in close correlation with the VIX.

Wed, 08/18/2010 - 11:09 | Link to Comment crosey
crosey's picture

LOL!  Funny as hell.

Wed, 08/18/2010 - 12:43 | Link to Comment Headbanger
Headbanger's picture

Me three! Cheers!

Wed, 08/18/2010 - 15:16 | Link to Comment ToNYC
ToNYC's picture

When you get off the trading carousel, will you be far from where you began?

Wed, 08/18/2010 - 11:07 | Link to Comment william the bastard
william the bastard's picture

30 pc returns on as much as 7 to 1 leverage in the greatest bull market of all time.  It's just been a trading market since 2000.  Druck is too old to trade. The bull market is dead. Long live the Bear.

Wed, 08/18/2010 - 11:26 | Link to Comment Cerulean
Cerulean's picture

You have a very good point.

We've had the biggest bull market ever over the last 25 years and most of these big HF which are very leveraged returned, say 20% over the period.

While 20% annually over 20 years is brilliant, considering  the circumstances ( Leverage and bull market) it's nothing to write home about.

Having said that, very few managed it.

Wed, 08/18/2010 - 11:35 | Link to Comment william the bastard
william the bastard's picture

Just looked up the 13F. Heavy sector bet on oil using larger mid caps and banking sector bet using large caps. Nothing to see here. Down 5 pc this year. Figures. Still scratching head about 30pc annualized.

Wed, 08/18/2010 - 11:14 | Link to Comment Bankster T Cubed
Bankster T Cubed's picture

Robertson quit after seeing the markets were, as evidenced by the 99-00 bubble run, broken

Stan D quiting after seeing GFS JPFM and the NYFFED taking the hindmost?

maybe?

Wed, 08/18/2010 - 11:36 | Link to Comment firstdivision
firstdivision's picture

Unwinding a $30B fund will cause some panic selling, unless the Fed is buying all the funds positions.

[EDIT] Guess it wasn't $30B like I heard reported on BBTV.[/EDIT]

Wed, 08/18/2010 - 11:25 | Link to Comment ARW
ARW's picture

"...returns that had averaged 30 percent annually since 1986."

 

 

Im-fucking-possible.

Wed, 08/18/2010 - 12:02 | Link to Comment ZeroPower
ZeroPower's picture

If its an avg i dont see why its so impossible.

Wed, 08/18/2010 - 11:30 | Link to Comment Cerulean
Cerulean's picture

I think he's right. He should have done it years ago.

Why bother managing others people money when you're a billionnaire. Not worth the headache.

Is it greed?

The cleverest of the lot was the guy who took over from Peter Lynch at Magellan, rode the dot com bull market, pocketed $500 millions for himself and then got out to manage his own money.

 

Wed, 08/18/2010 - 11:39 | Link to Comment redpill
redpill's picture

Not greed.  At some point people pour so much of their life into their work that it defines them, and without the grind they no longer know what to do with themselves.  They give up hobbies and leisure thinking they can enjoy them later, only to find that by stripping them out of their life they entirely forget how to relax and enjoy life.  In retirement they become a borderline OCD shell of a human being fidgiting about and driving their spouses insane.

"Battle not with monsters, les ye become a monster, and if you gaze into the abyss, the abyss gazes also into you."

Wed, 08/18/2010 - 11:59 | Link to Comment Young
Young's picture

It's not (only) the money, it's the game. If you don't love the game anymore, why bother?

Wed, 08/18/2010 - 11:39 | Link to Comment Dr. Copper
Dr. Copper's picture

Right, because the retail investor really a) tries to and b) expects to achieve a 30% return every year.  Give me a fuckin break.

Wed, 08/18/2010 - 11:49 | Link to Comment Nihilarian
Nihilarian's picture

? And yet we had a housing bubble. History repeatedly demonstrates that retail investors always try to (vainly) and expect (naively) such returns, holmes.

Wed, 08/18/2010 - 11:43 | Link to Comment HedgeFundManager
HedgeFundManager's picture

Whatever, Goldman Sachs made money 100% of the time in the first quarter. Druckenmiller ain't shiat.  :-)

Wed, 08/18/2010 - 11:53 | Link to Comment firstdivision
firstdivision's picture

If only Druckenmiller had that direct line to the Feds, Treasury, and Oval Office like JPM and GS.

Wed, 08/18/2010 - 12:18 | Link to Comment SheepDog-One
SheepDog-One's picture

Stanley Drunkenmiller should get on the Leo sunshine bandwagon and load up on Chinese solar stawks and mutter about 'big upside surprises soon!'

Wed, 08/18/2010 - 12:35 | Link to Comment godfader
godfader's picture

Julian Robertson's Tiger closed up shop in 2000, yet the next 10 years were full of amazing opportunities for the retail investor/trader.

Wed, 08/18/2010 - 12:46 | Link to Comment Headbanger
Headbanger's picture

"And retail investors hope to have any chance in this market"

 

Well you better sell ZH while you still can Tyler if us retail investors have no chance.

Wed, 08/18/2010 - 13:18 | Link to Comment doolittlegeorge
doolittlegeorge's picture

this "game" now involves extremes forms of personal violence.  when you look at "the City" being a wreck you understand how stinkin' small not only your "billions" are but YOU are as well.  The indvidualistic nature of investment sites and indeed investment itself makes it sound like YOU are OH SO IMPORTANT.  In fact all of us are meaningless worms and are merely waiting to have our "self" be recognized as such.  This man lived during an extraordinary time for investment returns.  Needless to say "this is time is different" indeed.  Once the bankers "turn to the other black hole" it is simply impossible for them not to foresee the consequences.  "Take a look in the mirror and see the echo overwhelm the voice."  That "echo" of course is of a collective will and indeed isn't it fascinating to see a "mis-read electorate."  Now MOVE ALONG.  Nothing going on here.

Wed, 08/18/2010 - 13:40 | Link to Comment Spigot
Spigot's picture

Note to self: watch who is doing what. Ask 'what do they know?'.

Wed, 08/18/2010 - 17:18 | Link to Comment Unscarred
Unscarred's picture

Plenty of time to get his affairs in order before the season opener.

Wed, 08/18/2010 - 18:13 | Link to Comment Leo Kolivakis
Leo Kolivakis's picture

Yeah, and we expect individuals to take care of their own pensions. GLTA!!!

Thu, 08/19/2010 - 05:22 | Link to Comment rolo
rolo's picture

This is a damn shame - the guy is/ was a total legend.  A real trader too who understood that it isn't just all about fundamentals, there is a place for technical analysis and market action.  Druckenmiller also understood the basic principles of trading well which shows in his track record.  Even if he thinks he underperformed over the last three years.

Sad to see him go.  One less real trader out there.

Sat, 10/02/2010 - 06:55 | Link to Comment Herry12
Herry12's picture

There are certainly a lot of details like that to take into consideration.I read and understand the entire article and I really enjoyed it to be honest.
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