One of the world's most successful hedge fund managers is calling it quits after more than 30 years of work in the financial industry. In a letter to shareholders Wednesday, Stanley Druckenmiller announced he would close his hedge fund, Duquesne Capital, and return investors their money.
When Druckenmiller speaks, investors would be wise to listen. His hedge fund has never posted a losing year. In 2008, as global equity markets crumbled, Duquesne Capital posted an 11% gain. In recent years, though, Druckenmiller has not been able to match the same level of returns his investors have been accustomed to. He refused to blame his retirement on the increased market volatility and unprecedented government intervention in the financial industry. However, he is concerned about the amount of leverage still in the system, saying, "We are setting ourselves up for a much worse problem if we don't deleverage."
Investors should also be aware that as Druckenmiller unwinds his fund, some of his largest positions could face some downside pressure. This selling could also be exasperated by the increased volatility in the markets that we have seen this summer.
In particular, as of the firm's June 30 Securities and Exchange Commission filing, Duquesne owned substantial amounts of tech stocks Apple
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