Red Sox Owner's Fund Gets Bloodied

Updated from May 7

Tom Wolfe calls them the new masters of the universe. The media goggle over their billion-dollar fees. For the top tier of hedge fund managers, the sky looks like the limit.

Yet, away from the headlines, one of the industry's legendary pioneers is quietly sinking toward crisis as half of his clients have lost money over the long haul.

How big is John W. Henry? He was a hedge fund king before anyone had heard of such a thing. He's been speculating on the Street with billions since the early 1980s -- when most of today's big shots were still in junior high, and an "alternative investment firm" was one that allowed chinos on Fridays.

For nearly 20 years, he left Wall Street trailing in his wake as he racked up huge profits for his clients and himself. Henry's managed futures firm used, and even pioneered, quantitative chart-based trading strategies to beat the market.

Henry became a legend. He made so much money he was able to buy the Florida Marlins. Then, most famously, he bought the Boston Red Sox and took them to a World Series victory.