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A 79% return is both astounding and not enough. T. Boone Pickens has seen his energy funds push that much higher this year, but it comes on the heels of 2008, in which his firm, BP Capital, lost more than 90% of its value – plunging from assets under management of more than $4 billion to $500 million. The Energy Equity fund lost 64% of its value, with the Energy Fund off 98%.
The 54% decline in oil prices from last summer – from a record high of $147 – not only pushed Pickens' investments lower but prompted him to exit positions and, in October, lift restrictions on withdrawals by his clients.
Energy Fund II, which has the same strategy as the original Energy Fund (which lost almost all its value last year), has shown the strong 79% returns that turn investors on, but this great number is a long way from replacing the shareholder wealth that was destroyed in the past year.
The good news? Pickens' funds are still up from the $36 million with which he started BP Capital in 1997. Over the long term, he's done well. And, he has a lot at stake, as the fund's largest investor (at 20%). That doesn't mean a hell of a lot to anyone who entered the funds in 2006 or 2007, though.
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