Fenway Sports Group is the parent company that holds John Henry’s ownership interests in the Boston Red Sox and the Liverpool Football Club. Last week, his money management firm, John W. Henry & Co., announced that it is closing. In its worst-performing programs, it has lost as much as 21% YTD and 32% over the past year.
You can never afford to lose money, but it’s even more important not to lose it when you’re in retirement. What if you don’t own a baseball team or a soccer team to help you get through the tough times? I am sure there are a lot of people who used to be wealthy who believed that John Henry had the Midas touch. That sure bet has gone wrong.
JWH & Co. has seen its assets under management dwindle from $2.5 billion in 2006 to less than $100 million at one point this year. What’s left of client money is being returned. According to The Wall Street Journal:
The performance of Mr. Henry’s firm, established in 1982, has long depended on long-term, distinct trends in various markets. The firm generally searches for markets that are making significant moves and jumps in, betting that they will continue. The choppy markets of recent years, and a relatively placid 2012, both have hurt.
There have been few distinct, dramatic trends for these kinds of traders to pursue. Mr. Henry’s firm has scored some gains in some of its trades, according to its most recent letter to investors, but they haven’t been enough to offset losses.
Clients, including many individual investors, had exited the firm even as many hedge funds enjoyed an influx of cash from investors. In 2007, for example, Merrill Lynch & Co. withdrew about $600 million of investments from Mr. Henry’s firm. The move left the firm with about $500 million.
At the time, Mr. Henry said: “It’s very painful, one never gets used to poor performance periods.” Read more.