T2 Partners fund managers ending relationship Thu Jul 19, 2012 5:25pm EDT (Reuters) - T2 Partners hedge fund managers Whitney Tilson and Glenn Tongue have decided to part ways. The two money managers, who co-founded the fund in 2004, said in a letter to investors on June 22 that they are ending their partnership. Some say breaking up is hard to do but the split comes after the fund they managed had a rough year in 2011, losing 25 percent of its value. In June, T2 Partners rose 0.5 percent, trailing the broader stock market, which rose 4.1 percent. The fund was up 9 percent year-to-date, Tilson wrote in an investor note dated July 13. The letter to investors was made public on Thursday by Tilson. He had no further comment on the letter when reached by phone and Tongue was not immediately available for comment. "We are writing to let you know that, after careful consideration, we have decided to cease managing money together and will instead do so independently, in the firm belief that in doing so our investors will benefit over time," the letter read. The letter also detailed plans for a new structure at T2 in the wake of the breakup. Tilson, who began investing in 1999 with his T2 Accredited Fund, will run T2 Partners and its three main hedge funds. Tongue began his Wall Street career 17 years before joining T2 in 2004. He will take over the T2 SPAC fund, which will be renamed Deerhaven Capital Management and act as a hedge fund. As of February 29, T2 said it had $333.4 million in assets under management. The letter said T2 Partners investors were given five days to redeem their investments. "I decided to sell most of our stocks ... and raise the fund's cash position to nearly 70 percent," Tilson wrote in the letter. "As I resume the role of sole portfolio manager, it's critical that I rebuild the portfolio from scratch and truly 'own' the ideas," Tilson wrote. Further, he said his letters will now come on a quarterly basis instead of monthly. Since the financial crisis, T2's performance has been mixed. The fund rose 37.8 percent in 2009, and 10.5 percent in 2010. But ill-timed bets on companies including Netflix (NFLX.O), Iridium (IRDM.O) and Citigroup (C.N) among others, led to what Tilson dubbed "a dreadful year" in 2011. Tilson is known as one of the more accessible hedge fund managers in the $2 trillion industry. He is a co-organizer of the popular Value Investing Congress, at which prominent managers come to share their stock ideas with investors. The conference is often attended by Greenlight Capital's David Einhorn and Pershing Square Capital Management's Bill Ackman. Reporting By Melvin Backman and Katya Wachtel; edited by Matthew Goldstein, Bernard Orr