Renowned short seller Jim Chanos is reportedly shutting down his hedge funds after an impressive career spanning almost forty years, according to The Wall Street Journal. Chanos gained fame for his contrarian bet against Enron, the energy trader that famously collapsed in 2001, which resulted in a significant fortune for him. Despite this success, he has also faced setbacks, most notably in his campaign against electric vehicle maker Tesla (ticker: TSLA). Although Tesla's stocks have risen by approximately 90% this year, Chanos' efforts against the company have failed.
In an interview with the Journal, Chanos cited changes in the marketplace as his reason for winding down his funds. He plans to return most of his investors' money by December 31st and will shift his focus towards advisory and research work for a select group of clients, as well as managing certain separately managed accounts.
Chanos & Co., originally founded as Kynikos Associates in 1985, will return capital to investors by year-end, as confirmed in a letter to clients that was sent out on Friday. The firm's name is derived from the ancient Greek word for "cynic." No immediate response was provided by Chanos & Co. when contacted for comment on Saturday.
Currently managing less than $200 million, a significant decrease from $6 billion in 2008, Chanos' funds have experienced a 4% decline this year, as reported by the Journal. In comparison, the S&P 500 (SPX) has seen an 18% increase, including dividends.
Acknowledging the challenges faced by the long/short equity business model, Chanos expressed his views on the declining interest in fundamental stockpickers in his letter to clients, according to Bloomberg. Despite his unwavering passion for research and investing, Chanos feels compelled to explore new avenues to pursue these passions.
Chanos has had previous encounters with controversy. In a 2002 cover story titled "The Bear That Roared," his eventful career was detailed, highlighting his rise to prominence as a Wall Street analyst in his twenties. Notably, he shocked skeptics by predicting the downfall of the successful annuity company Baldwin-United in 1982, which eventually filed for Chapter 11 bankruptcy just thirteen months later.