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Special Report

Interview with Jeff Vinik

Former Magellan manager Jeff Vinik explains why he closed his hedge fund.

You have to know when to fold 'em. With four years of unimpeachable performance in the record books, millions in the bank, and three young children and a fourth on the way at home, former Fidelity Investments star Jeff Vinik thinks the time to fold his hedge fund is now.

Late last month Vinik, who ran Fidelity Contrafund (FCNTX), Growth & Income (FGRIX), and Magellan (FMAGX) before starting his own firm in 1996, surprised the investment world by saying he would close his hedge fund to spend more time with his family. In a recent conversation with Morningstar.com, Vinik talked about his decision to give investors in his $4.2 billion hedge fund their money back after posting a cumulative four-year return of 440% after fees. Vinik, who will continue to manage his family's money, also talked about how he relied mainly on "hard work and plain-vanilla stock-picking" for his results, even though hedge funds can employ fancier techniques like short-selling and leverage. Finally, Vinik maintained he never felt he had anything to prove after leaving Fidelity under the cloud of an ill-timed market call at Magellan. An edited transcript follows.