Robert Karr announced he is closing down his 17 year-old
Joho Capital and returning all outside money to investors and
becoming a family office at the end of the first quarter.
In a fascinating, heartfelt seven-page letter to clients
dated January 30, the Tiger Cub said he is shutting his New
York City-based firm to spend more time with his children,
stressing he made this decision "with mixed emotions."
"This is something I have been considering for the past few
years with the hope that when we ended, it would be on a
positive note and we would be able to reward our investors for
their loyalty and our colleagues for their very hard work,"
Karr writes. "Since the financial crisis, solid returns have
been more challenging, but with a strong 2013, I feel now is
In 2013 Joho Partners and Joho Fund gained 30.3 percent net
of fees, which Karr calls one of the best in the
firm’s history. Since its November 1996 inception,
the fund gained 20 percent or so.
The firm has a total of $4.9 billion in its long-short hedge
funds and another $243 million in long-only funds.
"Over the past 17 years, my energy and focus centered
around three priorities: my family, our foundation and Joho,"
Karr continues in a letter that reads like a confessional that
others might be reluctant or afraid to publish. "Joho, as might
be expected given the nature of the industry, has often
received the greatest share of that energy."
Joho specializes in investing in Japan and other Asian
markets. In the letter he says on a typical day he wakes up at
5 A.M. to see how Asian markets closed, then spends a full day
in the office, then and trades the morning session of the Asian
markets at night. "I have loved the work, but it is difficult
to turn off," he admits.
Karr goes on to explain that the key to Joho’s
success has been the firm’s stock selection and
focus on the long-term outlook for companies. This required him
to spend at least two months of the year in Asia visiting the
operations of his holdings. "These trips were draining but
necessary to stay on top," Karr admits.
He explains that his wife has "carried the heavier burden
for parenting" his two teenage children who are a few years
from college. He says before they leave he wants to spend more
time with them.
Karr also gives a nod to his grandfather, Chum, who began
teaching him about the stock market when he was 15 and helped
him to find the work he loved. Karr says they collectively
invested the money he earned, "weeding his exuberant Pacific
In the letter, Karr also discusses the challenges and
pressures to annually fund his foundation he created 10 years
ago. He talks about the inequalities in the K-12 public
education system and how his foundation has focused on "giving
every child access to high-performing public schools and
He adds that in the future he wants to "spend more time
helping to ensure that all children have the ability to pursue
life-long happiness, which is difficult without an
As for investing, Karr says he remains bullish on Japanese
equities and believes the Abe administration "will successfully
orchestrate a mini-asset bubble over the next few years." He
says the big challenge will come when "meaningful inflation
returns and the BOJ [Bank of Japan] starts to taper."
Meanwhile, he says he plans to reduce his current position
of 67 longs and 55 shorts to roughly 20 apiece.
He then plans to invest some money with other managers and
to seed some of Joho’s analysts, who will
initially invest internal capital only and over time may seek
"Although Joho’s change may not sit well with
everyone, I have strong conviction that now is the time," Karr
concludes. "My top three priorities are all asking for more of
me, and I am not getting any younger. As we age, time becomes
our most precious commodity, and I look forward to having more
of it. More time to see life through my boys’
eyes, expand my investment universe, try new recipes with
Suzanne, read more books (serious and silly), help
less-fortunate kids find happiness, learn more about other
social causes, travel the world seeking adventure and culture,
explore new music, find new athletic endeavors, and basically
smell the fresh air and enjoy the moment."