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Former Oakmark Manager Sanborn to Start Hedge Fund

But if you can't spare $5 million to get in, forget it.

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Nearly a year after his ouster as manager of the Oakmark Fund (OAKMX), Robert Sanborn's future plans are set.

Sanborn says he will launch a hedge fund this spring, but it's unlikely that many of his former Oakmark Fund shareholders will follow him. The fund's $5 million minimum investment will put it beyond the reach of most folks, and even some well-heeled Oakmark investors may balk at the fund's strategy, which allows Sanborn to short stocks equal to 30% of assets. Still, this higher-risk approach also carries with it the potential for outsize gains: Sanborn says an account he ran using this strategy returned 85% during the fourth quarter of 2000, thanks in part to some shorts of formerly high-flying Internet stocks like Yahoo (YHOO).

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Scott Cooley does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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