Atticus Capital bails out of hedge fund business, will return $3B to investors

Atticus Capital LLC, a New York-based hedge fund shop, is returning $3 billion to investors as the company founder opts out of the hedge fund business, according to a letter sent to shareholders yesterday. The firm will continue to manage the $1.2 billion Atticus European Fund. Timothy Barakett ,44, who launched the firm with $6 million in seed capital in 1996, said in the letter that the decision to shut down the fund he manages was “solely a personal one.” “After 15 years of being singularly focused on building and managing Atticus, I believe it is time to reassess my future,” the letter stated. “I intend to spend more time with my family, pursue my philanthropic interests and establish a family office to manage my own capital and charitable foundation.” According to published reports, Mr. Barakett’s hedge fund, Atticus Capital LP, which was known for its shareholder activist strategy, was severely punished in the 2008 market downturn. The firm reportedly had approximately $20 billion under management at the end of 2007, when Mr. Barakett earned nearly $500 million in management fees, ranking him as one of the 10 highest paid hedge fund managers that year. According to Mr. Barakett’s letter to shareholders, through July the fund had a 12-month loss of 13.3%, which calculated to a net loss to investors of 20%. The Standard & Poor’s 500 stock index was down 22% over the same period. According to Mr. Barakett’s letter, only 5% of investors have submitted requests to redeem their money. “I have used the market’s recent strength to begin liquidating a significant amount of our holdings,” the letter stated. “We currently expect that the portfolio will be fully liquidated by Sept. 30 and that we will be in a position to return approximately 95% of your capital in early October.” The remaining assets will be returned to investors following a final audit later this year, according to the letter. According to reports, Atticus Capital will continue to manage the $1.2 billion Atticus European Fund.