March 1, 2024

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Short Seller Jim Chanos Shuts Hedge Funds After 38-Year Run

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(Bloomberg) — Jim Chanos, the legendary short seller known for his bearish bets against Enron and Tesla Inc., is shuttering his hedge funds after almost four decades.

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Chanos & Co., which he founded as Kynikos Associates in 1985, plans to return most capital to investors by the end of the year, according to a letter to clients Friday.

“It is no secret that the long/short equity business model has come under pressure and interest in fundamental stock pickers has waned,” Chanos wrote. “While I am as passionate as ever about research and investing, I feel compelled to pursue these passions in a different construct.”

His hedge funds have dropped about 4% so far this year, and the firm’s assets have shrunk to less than $200 million from about $8 billion in 2008. Chanos, 65, will continue to run his firm, mostly investing his personal capital but also managing money for certain clients in separately managed accounts.

His firm will continue to offer investors “bespoke advice on fundamental short ideas and portfolios as well as the occasional profitable macro insight,” Chanos wrote. As it winds down, clients will get roughly 90% of their cash back by year-end, and the rest in the first half of next year.

Chanos, a frequent presence on television and X, the social media platform previously known as Twitter, said he’s shuttering the funds after returning almost $5 billion of profits to investors since the firm’s inception.

The Wall Street Journal reported on his decision earlier.

Chanos started an analyst in the early 1980s, publishing sell-side research when the realized he had a knack for finding troubled companies. Raised in Milwaukee, he initially planned to be a doctor before switching gears to get an economics degree from Yale University. When he started his New York-based firm, he picked the name Kynikos — the Greek word for cynic. His firm tended to look at three types of shorting themes: consumer fads, debt-fueled asset manias…



2023-11-17 20:04:17

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