A former trader at Enron, the wunderkind often produced triple digit returns for his investors. In 2006, his fund generated returns of more than 300%. Arnold made his debut among the Forbes 400 list of America’s richest the next year at age 33. “People were dying to get into his funds for years,” says my source. But lately, he has not been able to come close to those figures. He supposedly had his first down year in 2010. He generated net returns of 9% in 2011, earning an estimated $360 million, enough for him to rank 9th among the top hedge fund managers last year.
In his letter to his investors announcing that he was closing his fund, Arnold said that after 17 years as an energy trader he felt it was time to pursue other interests. As my colleague Nathan Vardi pointed out last week when the news broke, the Texan will likely donate at least some of his time to philanthropic ventures. In his and his wife Laura’s letter agreeing to sign onto the Giving Pledge, the couple said they intended to devote the majority of their wealth, time and resources to philanthropy in the coming years. They are already intimately involved in the direction and daily execution of their foundation, which they established in 2008.
Arnold will also likely keep busy helping manage the foundation's more than $700 million in assets, not to mention his own personal stash of $3 billion, which made up the bulk of the fund that was closed. But now, like other hedge fund titans such as George Soros who have gotten out of the business lately, he won't have to worry about the new Dodd-Frank regulations that is forcing all large hedge fund managers to register with the U.S. Securities and Exchange Commission. Arnold could not be reached for comment today.
