T. Boone Pickens, Raider-Turned-Wildcatter, Shuts Hedge Fund

(Bloomberg) -- Legendary oil tycoon T. Boone Pickens is closing his hedge fund, saying oil trading has lost its luster.

Instead, the onetime Texas oil wildcatter wrote in a LinkedIn post that he wants to invest in “personal passions like promoting unbridled entrepreneurship and philanthropic and political endeavors.”

Pickens, 89, also cited his health in the post, writing, “I’m still recovering from a series of strokes I suffered late last year, and a major fall over the summer.” He added, “It’s time to start making new plans and setting new priorities.”

Though he achieved much of his fame for corporate takeover bids in the 1970s and 1980s, Pickens earned much of his wealth in the energy futures market after turning 75 in 2003, making billions through his Dallas-based BP Capital LLC by correctly betting on rising prices for oil and natural gas.

Pickens joins a number of big-name hedge fund managers who have closed their doors in the past year. Andy Hall, the trader known as “God,” shut his main fund in August after it slumped almost 30 percent in the first half of last year.

Hard Decade

John Griffin of Blue Ridge Capital, Hutchin Hill Capital’s Neil Chriss and Eric Mindich of Eton Park Capital Management have also called it quits. While the number of hedge funds shutting operations declined last year, there were still 66 more firms closing than starting, Eurekahedge data show.

Pickens was managing more than $4 billion at the start of 2008 before one of his funds was almost completely wiped out and a second plunged 64 percent. Undaunted, he sought out new investors the next year for new hedge funds that invested in stocks and futures. As of the end of 2016, BP Capital Fund Advisors had about $335.1 million under management.

“All the funds have been shuttered and the money returned to investors,” other than investments Pickens specifically listed in his LinkedIn post, Jay Rosser, his spokesman, said in an email. Pickens said he will continue to be an owner and investor in the TriLine Index Solutions energy index series and the BP Capital TwinLine Energy Fund.

Energy Volatility

Pickens probably fell victim to diminished volatility in energy markets, according to Rob Thummel, who helps manage $16 billion in energy assets at Tortoise Capital Advisors LLC. “It’s a sign that oil volatility is probably not coming back for a while, and that’s what traders are looking for,” Thummel said by phone. “It’s not as lucrative.”

In the latest Forbes Magazine listing, Pickens’s net worth is listed at $950 million in 2013, reflecting losses from the 2008 financial crisis, hundreds of millions Pickens spent on philanthropy (including about $500 million to Oklahoma State University, his alma mater) and investments in wind energy, part of his plan to end U.S. dependence on Middle East oil.

In December, Pickens put his 65,000 acre (26,305 hectares) Mesa Vista Ranch in the Texas Panhandle up for sale, with an asking price of $250 million, according to the Dallas Morning News.

Pickens was probably known best as a corporate raider in the 1980s before he became a billionaire energy investor and television pitchman for wind and natural gas.

“There’s no one, probably other than Warren Buffett, who’s seen and actually lived through all these cycles in oil,” Thummel said.

--With assistance from Saijel Kishan David Wethe and Laurence Arnold

To contact the reporters on this story: Meenal Vamburkar in New York at mvamburkar@bloomberg.net, Margot Habiby in Dallas at mhabiby@bloomberg.net.

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net, Joe Carroll, Mike Jeffers

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