Chris Shumway, who announced he would step down as chief investment officer of his $8 billion Shumway Capital Partners in November, said he’ll return client capital by March 31, according to a letter sent to investors.
Mr. Shumway, who started the firm with $70 million in 2002 and has produced average annual returns of 17% before fees, will continue to manage money for himself and his employees.
Investors had asked to redeem $3 billion after Mr. Shumway told them of his plan to step down. Last year, Mr. Shumway appointed Tom Wilcox as sole portfolio manager, while saying he would continue to oversee the fund as CEO and chairman of the management committee. He named Mr. Wilcox and three other employees as partners at the firm.
Mr. Shumway, an alumnus of Tiger Management, trades stocks worldwide. Shumway’s three funds returned about 2% last year. Since inception, the funds’ average annual performance beat the S&P 500 by 14 percentage points, before fees, according to the letter. The funds returned 3% before fees from October 2007 to March 2009, when the S&P 500 fell about 57%, the firm said.
Shumway has 95 employees, including 25 investment professionals. A number of Shumway’s alumni have opened funds in recent years, and Shumway expects other employees to start their own investment firms.
A leveraged-buyout fund run by Goldman Sachs Group Inc. bought an 8% stake in Shumway in January 2010.
As CIO, Mr. Wilcox would have been responsible for day-to-day management of the portfolio, while Mr. Shumway had planned to become a “super analyst” who would focus on finding a few, highly profitable investment ideas each year. He had also planned to manage risk and analyze macroeconomic trends.
“That’s how I started in this business,” he said. “I’m going back to that.”