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To: Jenna who wrote (115679)	10/26/2000 2:26:28 PM
From: puborectalis	Read Replies (1) \| Respond to of 120523

Vinik Closing Fund, to Return $4.2 Bln to Investors (Update2) By Katherine Burton New York, Oct. 26 (Bloomberg) -- Jeffrey Vinik, one of the biggest and best-performing hedge fund managers, said he's shutting the fund and returning $4.2 billion to investors to spend more time with his family. Vinik founded Boston-based Vinik Asset Management four years ago, after quitting as manager of Fidelity Investments' flagship Magellan Fund in the wake of a wrong-way bet on bonds. He and his partners Mike Gordon and Mark Hostetter will oversee a smaller pool of money for themselves and their families, Vinik said. Vinik is the third major hedge fund manager to retreat this year, following Julian Robertson's retirement and George Soros's decision to scale back on risky investments. While the others made their moves after heavy losses, Vinik's fund, one of the 10 largest, returned 46 percent the first nine months of the year. His assets rose sevenfold since he opened the fund. He closed it immediately to new investors after raising $800 million in 1996. ``Now he has the right not to be bothered by investors,'' said Mark Kenyon, head of Union Bancaire Privee Asset Management in New York, which invests about $4 billion in hedge funds. Vinik, who said he'll return the money by the end of the year, suggested the fund was already holding plenty of cash. ``We've had a conservative view of the markets,'' he said in an interview. ``We've been quite liquid, and there will be no problems having liquidity in full before the end of the year.'' Surprise Vinik said he and his partners had been thinking about scaling back for several months, but had only recently made the decision. ``We've had four successful years,'' said the 41-year-old Vinik in an interview. ``At this point I want to spend more time with my family.'' He has three children, ages six through 10 and his wife is pregnant, he said. Vinik told investors that the volatility in the U.S. market, cited by both Robertson and Soros earlier this year, wasn't behind his decision to close his fund to outside investors. ``We believe money-making opportunities in the market will continue,'' said Vinik. ``This was not an opinion on the market. I'm doing this solely for personal reasons. Vinik opened his own firm, which now has 22 people in a downtown Boston office, after seven-and-a-half years of managing money at Fidelity, including a turn at the helm of the Magellan Fund, the firm's flagship. He left Fidelity in May 1996, after $1 billion flowed out of the fund in the two previous months. Magellan was one of the worst performing U.S. mutual funds that year, as Vinik poured 19.4 percent of the $55 billion portfolio into bonds, pulling down returns. Fidelity and Vinik also faced lawsuits for price manipulation after he made comments to U.S. News & World Report praising Micron Technology Inc. while the fund was selling the semiconductor company's shares. Fidelity paid $10 million to settle the class- action lawsuit. The bad press didn't hurt him in raising money for his new fund. Within five months of leaving Fidelity, he'd raised $800 million, making him one of the largest hedge funds at that time. Investors who backed him were rewarded with returns that beat the benchmarks every year. In 1997, his first full year of operation, his fund jumped 75.7 after fees. In the two following years, he returned 44.8 percent and 29 percent.