T. Boone Pickens’ BP Capital Management hedge-fund has always delivered for its investors in a big way. In 2005 alone BP Capital returned 300%. If an investor had put up $1 million at the fund’s inception in fiscal 1999, the stake, when oil hit mid $130 levels, would have been worth well-over $50 million. That’s a 50-fold capital multiplication in 9 years.
Today however, as the nosediving of the energy patch continues, so have BP Capital’s funds and particularly the energy-oriented equity hedge fund which has lost about 60% of its value. Mr. Pickens has seen his private investment firm lose about $2 billion this year alone. A smaller commodity fund, which started the year at almost $600 million, has lost nearly 85% through Aug ’08. In addition, about half of the fund’s investors have asked to withdraw their money, after Pickens moved the fund almost entirely into cash to help preserve the remaining capital and ride out the volatility in the energy sector. It is yet unclear how many investors would remain invested in the fund.
According to Wall Street Journal – Picken’s BP Capital, will have approx. half a billion dollars left after expected withdrawals. It started the year with about $2 billion. The famed oil baron has personally lost an estimated $400 million in his funds this year.
But Pickens, while acknowledging that the amount lost is serious money, told his associates he is gearing up for his latest comeback. Asked if he’ll get it back again, he told award-winning journalist Charlie Rose on 60 minutes, “Yeah, I’ll get it back.”