Prominent investor Jeffrey Vinik is ready to manage money for outside clients again and plans to relaunch his hedge fund firm Vinik Asset Management after sitting out the last six years. Vinik, who once ran Fidelity's Magellan mutual fund and then oversaw $10 billion at his own hedge fund, is starting for a third time, he told Reuters on Thursday.
Based in Tampa, Florida, the 59-year-old plans to raise as much $3 billion for his portfolio and start trading within weeks, people familiar with his plans said. Explaining that he missed competing with some of the world's biggest institutional investors, Vinik is returning just as a handful of his former rivals are throwing in the towel.
"I think hedge funds have taken their eye off the ball," Vinik said, adding "Stock picking is a lost art and not many people are doing it well." For years hedge funds underperformed rising stock markets and last year they failed to deliver on promises to protect capital when the average stock-oriented fund lost 7 percent, according to Hedge Fund Research data.
But Vinik, who has lived through a number of economic cycles, said the basics of greed and fear in the investment community always stay the same, and vowed he is ready to face what analysts are forecasting could be a rocky 2019. "2019 might be bumpy but for the next 10 years, I'm bullish," Vinik said, adding that safeguarding his reputation as an investor will be a major motivating force to outperform.
"I'm not doing this to not do well," he said, adding that financial and technology stocks are likely to continue being profitable in the years ahead. In 1996 when he launched his private hedge fund, Vinik's reputation was so powerful that the firm took in $800 million on day one and closed to new investors immediately.
Within four years the firm was managing $4.5 billion and it peaked at $10 billion. By the time Vinik was ready to close - the move coincided with his own move to Tampa from Boston - the firm had returned an average 17 percent a year. Even after Vinik earned a fortune once estimated at close to $2 billion and spent some of that money on stakes in sports teams including the Tampa Bay Lightning and for a time the Boston Red Sox, he said he is the one now calling the shots at the firm. "I am the analyst, I am doing the work," he said.
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