In Soros mold, ex-Enron gas trade whiz Arnold turns giver

Thu May 3, 2012 7:55pm EDT
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By Kristen Hays and Jeanine Prezioso

HOUSTON/NEW YORK (Reuters) - To the list of unexpected windfalls created by the boom in shale gas production, add one more: The full-time philanthropy of billionaire trader John Arnold.

Tired of struggling to eke out gains in a natural gas market that has been deluged by an unyielding surplus of supply, Arnold announced on Wednesday that he would wind down his Centaurus hedge fund after a decade of unparalleled returns. The fund was flat this year through March, according to an industry source.

In one way, the hydraulic fracturing technology used to tap into decades' worth of cheap domestic gas has cut short the career of the legendary trader, one who before the age of 40 amassed a fortune of more than $3 billion in the wildest commodity ever.

That volatility has been flattened by a glut of natural gas thanks to technological advances that allow much more to be produced from hard shale rock than ever before.

But there's a flip side: Arnold, the biggest financier-turned-giver since George Soros, will now fully focus his sharp wits and financial savvy on vexing issues ranging from pension reform to public schools, directing the $700 million foundation he founded with his wife Laura in 2008.

The couple -- widely respected in their home town of Houston, which still lives under the shadow of Arnold's erstwhile employer Enron -- expects to see results.

"They make a distinction between charity and philanthropy," says Jim Crownover, chairman of Rice University's board of trustees, on which Laura Arnold serves. John Arnold also serves on the board of the Rice Management Company, which oversees the university's $4.5 billion endowment.

"They think investment vs. donation," he said. "They're looking at places where the market doesn't work, like in education."   Continued...