Boston Magazine May 2009

The Owner Takes a Wife

Buttoned-down Red Sox owner John Henry revealed a very different side of himself during his topsy-turvy courtship of Linda Pizzuti. (We've got the soul-baring e-mails and love-struck vacation photos to prove it!)

By Emily Kumler

John Henry stood on the bow of his yacht, wearing a Red Sox T-shirt and tan safari hat, sunscreen covering his nose. Next to him was his fiancée, Linda Pizzuti, in a red tube top that revealed a bit of black bikini underneath. She was explaining to him the history of the Bridge of the Americas, how it connects North America to South. As she read from her guidebook, he looked at her with bemusement. This cruise through the Panama Canal to the Galapagos had been her idea, and now she was serving as eager tour leader.

We'd spent the past three days cruising the canal aboard Henry's yacht, the Iroquois, a 164-foot vessel with a dozen crew. The trip would be the farthest south Henry had ever ventured, and an immeasurable distance from the posh Mediterranean and Caribbean vacations he was used to. But then, his relationship with Pizzuti has been full of firsts. They were a couple no one could have seen coming—and one that, for a while, had looked doomed. Along the way, Henry, an intensely private man, showed a side of himself that would surprise the Bostonians for whom the 59-year-old Red Sox owner is such an enigmatic figure. I know, because as one of Pizzuti's closest friends, I had a front-row seat to the whole thing.

See a slide show of photos featuring Henry and Pizzuti's romance. 

Henry began the evening of June 6, 2008, as he did many nights since filing for divorce the previous year: out with the guys. He and Red Sox chairman Tom Werner, a fellow divorcé, met for dinner at Scampo at the Liberty Hotel, one of their favorite haunts. The third member of their party, nightclub owner Ed Kane, was delayed leaving his 25-year Harvard reunion. So to kill time they headed over to the adjacent Alibi bar, where Harley Bilzerian, daughter of Newbury Street boutique owner Alan Bilzerian, was celebrating her 30th birthday.

The shy, somewhat awkward Henry stood in the corner with Werner, who threw open his arms to hug two of Bilzerian's friends when they came over to say hello. The women were soon joined by a third. Her poise—not to mention her glossy dark hair, endless eyelashes, and ear-to-ear smile—made an immediate impression on Henry.

"John Henry is staring at you," Amy Belkin, daughter of developer Steve Belkin, told Pizzuti.

"Who's John Henry?" Pizzuti asked.

Though a Boston native, Pizzuti didn't follow sports. Feeling uncomfortable with the stranger's attention, she avoided eye contact. Henry, for his part, kept staring and racking his brain for something clever to say.

Werner, Henry, and Kane call themselves the Cirque du Rire, or Circus of Laughs. They came together after David Ginsberg, vice chairman of the Red Sox, introduced Kane to Henry in the summer of 2007. The group proceeded to spend what was by their count close to 100 straight days together—going to games, eating dinners, watching movies. It's not often men their age meet comrades they feel so akin to; they think of themselves as brothers. "Between Tom, Ed, and me," Henry says, "it's never boring."

It was 11 p.m. when Kane finally arrived at Alibi with girlfriend Aurora Ransbottom. He asked Henry what he'd missed. "I said, 'Well, there is an interesting woman over there I was introduced to,'" Henry recalls. He told Kane he couldn't think of anything to say to her. "Really?" Kane said. "No problem, I'll send Aurora over." As Ransbottom approached the woman, "I watched in a little bit of horror," Henry says.

Taking charge, Ransbottom asked Pizzuti if she would like to join them for a late-night bite at the South End restaurant Stella. Pizzuti shot back with questions: How well did she know these guys? How long had she known them? But after a powwow, our group of friends convinced her to go with the moment. I made her promise to call when she got home.

At Stella, Henry and Kane traded funny stories about celebrating the 2007 World Series win. Pizzuti, not being a fan, didn't get a lot of their references, but she found their humor disarming. Afterward, she accepted Henry's offer of a ride home, and sat next to him in his Mercedes coupe, with Kane and Ransbottom squeezed into the back seat. Henry dropped the couple off first. As they walked away arm in arm, Henry said, "Look how in love they are." After lingering a moment, he drove Pizzuti to her North End apartment.

"Let me know if you'd ever like to go to a baseball game," he told her, handing her his Red Sox business card. Pizzuti thanked him, but had no intention of taking him up on the offer.

Pizzuti is the kind of person who always remembers your birthday. She's also the first one to pick up where the conversation left off, as if she's got a BlackBerry full of the major transitions in your life. When I met her three and a half years ago, there was a group of us who'd recently become close. We'd all grown up in the Hub, and most of us had lived elsewhere after college; now, in our twenties, we were back and eager to redefine ourselves as adults. As it happens, we were also all raised by entrepreneurial fathers who'd taught us to follow our own path, as they had.

Pizzuti's dad, Don, moved to New England from Italy when he was a teenager. He worked as an engineer for companies like Polaroid and GE while building a real estate portfolio on the side. Eventually he ventured out on his own, and today his development firm is full of Pizzutis, including Linda, 30, and her three older sisters. Linda, who has a master's in real estate development from MIT and is LEED accredited, focuses on sustainable projects, most recently a group of green townhouses in Lynnfield, where she grew up.

An avid traveler, Pizzuti has eaten dinner atop Mount Kilimanjaro and gone diving in search of shipwrecks in the Philippines. It's not rare for her to jet to London for a weekend or skip off to Egypt on a family vacation. When she met Henry, she was gearing up for a 10-day visit to Europe.

Pizzuti figured their first encounter would be their last: His fame was enough to put her off, but the fact that he was 29 years older was the real deal-breaker. Her family was old-school Italian, and they'd impressed upon her the importance of reputation. "On paper, it didn't look great. He was twice my age, and divorced," she says. "I love Boston—but it's a small town."

Still, wanting to be polite, she sent Henry an e-mail thanking him for the meal. He wrote back, claiming MIT president Susan Hockfield had told him at an event that she really hoped Pizzuti wouldn't retire from the alumni board. Pizzuti realized Henry had Googled her and was using what he'd learned to let her know she was still on his mind. But she didn't respond, and Henry assumed he wouldn't see or hear from her again.

And he might not have, if Boston weren't such a small town.

On June 18, Henry and Pizzuti happened to attend the same event at the new Renaissance Hotel on the waterfront. Pizzuti was immediately approached by Henry's Circus comrades, armed with questions out of a ninth-grade playbook: Did she like Henry? Why didn't she return his e-mails? Taken aback, Pizzuti pulled no punches. She told them she was scared of Henry's public persona.

Eventually, she and Henry found themselves in the same conversation circle. Someone mentioned the previous night's Red Sox game, and Henry asked Pizzuti, "Did you see it?" "No," she answered, in a tone intimating she had a life, "I was on a date." Yet as they talked, she found herself charmed by his wit and intellect. With some help from Werner and Kane, Henry convinced her to join them for a dinner at Via Matta with chef-owner Michael Schlow.

Afterward, they decided to head over to the Estate, one of Kane's nightclubs. It was pouring outside, big drops plopping onto the sidewalk. Henry rushed out to Via Matta's patio, grabbed a table umbrella, and, brandishing it with pride, offered Pizzuti shelter. As the group walked up Boylston Street, passersby and drivers stopped and stared at the two, sauntering through the rain under an umbrella fit for Alice in her wonderland.

The clientele of the Estate leans heavily twentysomething, with Red Bull cocktails and short skirts in abundance. That night the club was crowded, and the music deafening. As Henry attempted to chat with Pizzuti, his personal manager handed him earplugs. (The manager always keeps a pair handy, knowing Henry, who used to have his own rock band, is protective of his hearing.) So Pizzuti, wanting to better know this man who'd just sheltered her from the rain in a borrowed patio umbrella, broke out her BlackBerry and showed Henry how to use his for instant messaging. They pinged notes back and forth all night. It was the beginning of what would grow into a modern epistolary romance.

When Pizzuti told Henry about her upcoming trip to Europe, he asked if he could meet her in Paris. Wild as it may seem, this wasn't the first time a man had made her such an offer. But none had followed through, and all those trips-that-weren't had made the city symbolic for her. Though impressed by Henry's eagerness, she politely turned him down.

Nocturnal by nature, Henry is often up until 3 a.m., checking the Japanese markets, strategizing with Sox GM Theo Epstein, or playing with his iRacing simulator, which mimics the cars of his Roush Fenway NASCAR team. This night, though, something else would keep him from sleep. Ever since his divorce, he hadn't believed romance was in his future, but after he and Pizzuti parted, he headed home to Brookline and fell into bed fully clothed, replaying the evening. He was amazed by the intensity of the feeling.

Kane and Werner knew Henry was smitten. There were no topics off-limits among the three men.

Henry and Werner met in 2001, the year Henry (who had made his fortune in futures trading) was considering purchasing the Anaheim Angels. When he lost interest in that deal, he contacted his friend Larry Lucchino, whom Henry had gotten to know while the owner of the Florida Marlins. Lucchino was at the time working with Werner to bid on the Red Sox. Henry sat down with Lucchino late one night in New York to discuss the Sox, then flew to L.A. to talk with Werner.

"We went to dinner," recalls Henry, "and when we were leaving I said, 'You're a lucky man, Thomas: bidding for the Red Sox, an über-successful TV production company, three kids. You're loved by everyone I know who knows you. And you're dating Katie Couric.'" To which Werner jokingly replied, "They're the lucky ones!" "I soon found out," adds Henry, "he was pretty much dead-on right."

Neither of them thought they'd wind up single at the same time. "I didn't think we could get any closer, but we did," Henry says.

Kane, Werner, and Henry talked a lot during the summer of 2008 about dating in general and Pizzuti in particular. Kane argued that if age was really the hang-up, they could consider Pizzuti "30 with an asterisk."

"Right out of the gate, I didn't think age should be a big deal," Kane says. "She's smart and accomplished. And honestly, John is hilarious. People think of him as a business guy, but underneath all that he's a really funny, warm guy." What's more, Kane respected Pizzuti's reluctance. "She was as cautious as she was curious. I admired that."

Pizzuti soon left for Europe, and Henry went on with his life. A week after he and Werner watched the Celtics' championship win over the Lakers from his courtside seats, they hosted a victory bash at Fenway. During the festivities, it began to rain.

That night, Henry e-mailed Pizzuti.

Dear Linda,

A man needs a muse. Well, he doesn't really. He doesn't need nearly as much as he generally thinks he does. A man is greedy. Greedy for what he doesn't think he has and what he thinks he wants.

We probably wouldn't have wandered far beyond the basic necessities without that pushing us. Progress is one of its most important byproducts.

So you will ask, "Why are you writing this?" Because a brief encounter-and-a-half with you gave a cool spin to this little blue planet from my vantage point.

We feted the Celtics tonight and the skies opened. The sun emerged and created a giant rainbow between the city and the park. We were transfixed.
You only saw it if you were in the right place. I was in the right place when I noticed you.

I barely know you. I don't have any illusions about capturing your heart. But the world is brighter, better, lighter and warmer when a man imbues a woman he knows—even tabula rasa—with the attributes I believe reside in you. It's the small things that ultimately matter. The subtle things.

I am honest. I don't play games. And I see no reason not to say that I've been smitten by you and you've done me a great service.

You've very innocently made my world brighter, better, lighter and warmer.

So thanks.

No response is necessary because a man doesn't need nearly as much as he thinks he does.

But Henry waited for her response anyway. When it finally came, it wasn't quite what he'd hoped for.

A man may not need as much as he thinks he does, but courage and honesty should be acknowledged. I am not so naive as to believe I actually possess the qualities you attribute to me. But thank you.

After earning her master's at age 26, Pizzuti—determined to avoid the procession into marriage, suburbia, and children—broke up with her then-fiancé and moved to the North End. Living alone and loving it, she was up early every morning to hit the gym or a dance studio for salsa lessons; after long workdays she juggled a full calendar of charity and social commitments. Trying to keep track of her could be exhausting.

In Prague, partway through her trip to Europe, Pizzuti found herself thinking about Henry. He had followed up after her e-mail with, "Just struck me—the similarities to Cyrano. Except the young Adonis is a BlackBerry"; she joked back that thankfully he didn't have Cyrano's legendarily big nose. She liked the highbrow banter, and she liked Henry's willingness to bare his soul. By the time she landed in Boston, she had convinced herself it would be okay to be friends.

But nothing more: When Henry suggested they go on a date, she wrote back, "It would be a fantastically bad idea to go out with you. It would lead to trouble and gossip in a small town." Turning to self-deprecation, he responded with a list of additional reasons she should refuse, including "My expiration date was about 10 years ago." Won over, Pizzuti agreed to meet him the following week at the Golden Goose market in the North End, where they would buy supplies for a cooking lesson on his yacht.

Three days before their "friend date," as Pizzuti dubbed it, Henry met Kane at the 1369 Coffee House in Central Square. (Henry, who'd only recently started drinking coffee, had become an effusive fan of the place—even flying one of its managers to his house in Boca Raton to train his staff on brewing techniques.) Afterward, Henry drove to the North End for dinner with Werner and his daughter, Amanda. He got lost and called Pizzuti for directions. She guided him in, but he was so late that the Werners had left. So he called again: "I'm across the street at Florentine. Come down!" Pizzuti refused, telling him she'd see him in three days as they'd planned, yet 45 minutes later she appeared at the restaurant. They strolled the neighborhood for hours, and at one point Henry tried to take her hand. She had to explain to him that it was too intimate for friends.

When Henry and Pizzuti met the cooking instructor at the Golden Goose, she realized it had been years since Henry had been to a grocery store, and probably decades since he'd cooked. But he seemed thrilled to go along with whatever she wanted to do. On the boat, Henry presented her with custom aprons: for her, "Ms. Pizzazz" (his nickname for her), and for himself, "Fantastically Bad Idea."

The next night, July 10, they attended Sox pitcher Josh Beckett's Beckett Bowl fundraiser, making a concerted effort not to be seen together. They followed up with a walk around the Bunker Hill Monument—this time, they held hands—and a late dinner at the Franklin Café, where a waiter told Henry's manager (Pizzuti was still insisting on a chaperone) that the couple looked madly in love.

A week later, Werner convinced Pizzuti to travel to L.A. to rendezvous with the Circus, who would all be in town while the Sox played the Angels. Werner's house there sits on a golf course with views of the rolling fairways, which inspired Henry to buy a tent and—mindful of the rules of this evolving "friends that hold hands" relationship—eight sleeping bags for a backyard campout. "John thought it would be romantic," Werner says. "I told him that was all well and good, but I preferred to sleep in my bed. I offered to make them breakfast in the house the next morning."

That night, in what Pizzuti regards as quintessential Henry, he had a debate with himself, out loud, about whether he was in love. He concluded that the answer was probably no. She thought, Okay, great, thanks, did I ask if you were? But the next evening, after screening Mamma Mia! at the home of a producer friend of Werner's, Henry changed his mind. "I must be in love," he announced, "because there's no way I would have sat through that movie if Ms. Pizzazz hadn't been next to me!"

For her part, Pizzuti was learning to take his directness in stride. "If he's thinking something, he shares it," she says. "I thought he was a bit nuts. Mostly I just laughed at his declarations."

When Henry and Pizzuti were together, they felt as if they were a perfect match: They shared the same intellectual curiosity, the same zest for life, even the same love of Italian food. But when they were apart, family, friends, and fear of the press would bring their big age difference to the fore. Pizzuti's parents wanted their daughter to grow old alongside her husband. Our group of friends worried she'd have to fit herself into his life, rather than building one together with him.

Pizzuti's already-packed schedule became even more hectic as she joined Henry's world. When the Sox had home games, she'd put in a long day at work, then meet Henry and their friends at Fenway. They'd often go to dinner afterward, getting home around 2 in the morning. Then she'd wake up at dawn and do it all over again. Pizzuti was still protecting herself, taking pains to maintain her independence, but by the end of the summer, I was wondering if she was really enjoying herself.

Kane remembers what he saw as the turning point for Pizzuti and Henry: "She wants to be Linda Pizzuti, not Linda Henry. I think once she realized it wasn't his intention to form her, their relationship took off. He appreciates independent thinkers." I knew it was serious when Pizzuti told me she was going to Paris with Henry on a double date with Kane and Ransbottom. This was a big gesture for her, considering the pedestal she'd put that city on. She was announcing that she trusted him.

After Paris, the two were inseparable. For her birthday in early September, Henry arranged for a helicopter tour of Manhattan and dinner at the Four Seasons, topped off with a cotton-candy dessert he had special-ordered. Before the night was over, though, the age difference came up again. Pizzuti's parents were still trying to talk her out of the relationship; she couldn't entirely ignore where they were coming from.

Henry's head was spinning. But he also felt protective toward Pizzuti, and was willing to end things if the age difference proved insurmountable. After hours of emotional back and forth, they at last reached a breakthrough. "There are no guarantees in life," Pizzuti recalls deciding. "I could get hit by a bus tomorrow. I'm not going to walk away from this incredibly special connection for the fear that I could outlive him, or that society will disapprove. I know that people have and will judge me and make assumptions about my intentions. But this is love." She finally declared that night that she loved him.

Now she just needed to convince her family. Henry and Pizzuti hosted her parents at Sox games, and the Pizzutis, in turn, had invited Henry to dinner at the Fairmont Copley Plaza and to a Pops concert (Henry and Pizzuti ducked out to hit a Madonna show), but that hadn't been enough. So Henry joined the family's "chaotic" (their words) annual pilgrimage to Disney World, celebrating Thanksgiving there with Pizzuti's mom and dad, and her sisters and their young children. Recognizing the effort Henry was making—and how happy their daughter was when she was with him—the Pizzutis came around at last.

The proposal came one afternoon last December, while they were in New York to honor Henry's Roush Fenway drivers at the NASCAR awards dinner. In an elevator at the Four Seasons, he took Pizzuti's hands and said, almost in passing, "Don't answer today or tomorrow, but will you marry me?" About two weeks later, she asked, as casually as she could, "So, did you really propose to me that day in New York?"

"What did it seem like to you?" Henry said.

"Sort of like a letter of intent."

The couple has set a date for late June. Pizzuti always wanted an outdoor reception under a big white tent, and Henry, as it happens, has access to a suitable venue. After a small, family-only ceremony, they'll host friends at a party in the Fenway outfield. Pizzuti, who tried on and rejected some 50 dresses in New York, will wear a gown made by Boston designer Michael De Paulo, who is crafting an Old Hollywood–style number for her. But maybe because she's been a bridesmaid enough times to go pro, or maybe because of Henry's calming influence, not much about the wedding planning seems to be fazing her.

I was the first of our friends to see Pizzuti wearing her ring. It was Super Bowl weekend (it took the couple a while to find the right setting) and we were sitting by the pool at the estate they now share in Boca Raton. Later that night they entertained a few dozen guests at the on-site bar, which is decorated with Red Sox World Series trophies and the broken champagne bottle used to christen Henry's boat. News of their engagement had come out in the Boston gossip columns, and guests offered their congratulations as Pizzuti floated around the room.

"John has helped me to appreciate the moment," she says now. "I tend to be overscheduled, but he has a better balance in his life. He'll savor a sunset, a beautiful day, a laugh, a warm feeling. He has slowed me down a bit."

Still, Pizzuti won't let herself, or Henry, slow down too much. Two weeks after the Super Bowl party, we were off on the cruise through the Panama Canal. One day Pizzuti arranged for us to take a canopy tour in the jungle; the next she had us off exploring the streets of Panama City. Between those excursions, I watched as she and Henry practiced their rumba to a Beatles mix he had made for her. She jokes that their first dance as newlyweds might be performed by body doubles. They're taking dance lessons, and, while they're not ready for prime time, they crack each other up the whole time.

Red Sox Owner Gets 91% on Oil After Striking Out on $3 Billion

By Kambiz Foroohar

June 23 (Bloomberg) -- On a late Friday afternoon in April, Boston Red Sox fans filter through the turnstiles at Fenway Park. Out on the field, New York Yankees stars Johnny Damon, Derek Jeter and Mariano Rivera stretch before the season’s first clash in one of the biggest rivalries in U.S. professional sports.

John W. Henry, 59, principal owner of the Red Sox and chairman of his namesake investment company, greets diners at the restaurant above home plate with his soon-to-be third wife, Linda Pizzuti, 30.

Henry, 6 feet tall with silver-streaked hair, wears a dark jacket, blue jeans and black glasses that make him look like a professor. His diamond-and-ruby encrusted 2007 World Series championship ring belies that image. As he heads to his box seat next to the dugout, well-wishers, many wearing Red Sox jerseys, clamor to say hello. Henry avoids eye contact and keeps his voice barely above a whisper.

“We were in the Louvre, in Paris, and four men came up to shake his hand,” says Pizzuti, wearing a red top and black jeans as she recalls the trip the couple took in the summer of 2008. The previous October, the Sox had won the World Series for the second time in four seasons. “I hadn’t realized what a big deal this was,” she says. “Here were grown men close to crying.”

Home Run

John W. Henry & Co.’s investment performance is also stoking enthusiasm. His $123 million JWH Global Analytics fund ended 2008 with a 91 percent return for the year, in contrast to the 38 percent plunge in the Standard & Poor’s 500 Index. To top it off, Henry met Pizzuti at the Alibi Bar in Boston’s Liberty Hotel in June 2008. Pizzuti, who has a master’s degree in real estate development from Massachusetts Institute of Technology, works at her father’s firm, Pizzuti Development LLC in Boston. She and Henry are scheduled to marry this weekend.

Henry is on a winning streak after three bleak years at his Boca Raton, Florida-based firm, a so-called commodity trading adviser, or CTA, that uses mathematical models to spot market trends.

Just a few months after champagne corks popped in October 2004 for Boston’s first World Series championship in 86 years, Henry’s investments began to tank. His longest-running fund, the Financial and Metals Portfolio, lost 39 percent from January 2005 through March 2007. JWH’s assets dwindled to less than $300 million by the end of 2008 from a peak of $3.4 billion in 2005. Merrill Lynch & Co., JWH’s biggest investor, withdrew its $600 million in investments in June 2007.

“They pulled the plug at the worst possible time for their clients,” Henry says of the end of the 20-year relationship. “But we were responsible for putting them in that position.”

Long-Term Trends

Like most CTAs, Henry’s firm buys and sells commodity futures and options. About half of Henry’s bets are in such areas as currencies, interest rates and stock indexes.

The son of a farmer, Henry drifted between colleges in Southern California and started trading soybean and corn futures in his 20s. These days, JWH invests in more than 80 markets, among them coffee and gold futures. Henry’s approach differs from that of his rivals in the $198 billion CTA market, which also goes by the name managed futures.

His computer programs look for trends that last more than 30 days -- longer than the 10 days for short-term trading strategies, according to Emanuel Balarie, managing director of Chicago-based financial adviser Balarie Capital Management.

Henry has stuck with the strategy since he founded JWH in 1982. When his programs find a trade, he bets as much as six times the fund’s assets and about double what peers wager.

‘Come Back’

“It can be difficult for those who don’t fully understand our approach to believe we will come back from a poor performance,” he says.

Henry’s tactics paid off last year when his computers captured the rise and fall in energy prices. Crude oil futures surged 51 percent in the first half of 2008 to $145.29 a barrel on July 3. Then oil and natural gas futures fell for the rest of 2008. Natural gas tumbled 33 percent in 18 trading days in July; crude plunged 69 percent to close the year at $44.60.

Even as JWH Global Analytics almost doubled investors’ returns in 2008 -- the third-best performance among CTA funds with at least $100 million, according to Fairfield, Iowa-based BarclayHedge -- Henry is finding it hard to attract clients.

In 1995, JWH was one of the largest firms of its type, controlling 6 percent of the $15 billion in global CTA assets. By 2002, as investments in CTAs climbed to $50 billion, Henry’s market share dropped to 2.5 percent.

Shrinking Share

By the end of last year, JWH Global Analytics, which held 52 percent of the firm’s $260 million of assets, ranked 173rd out of 969 CTA funds, according to BarclayHedge. Man Group Plc, Winton Capital Management, BlueCrest Capital Management and Aspect Capital, all based in London, control $40 billion, or 20 percent of total CTA assets.

JWH’s investments can swing 20 percent in a month, making pension funds and institutional investors queasy. In 2005, the average CTA fund gained 1.7 percent; Financial and Metals lost 17 percent. In the first five months of 2009, JWH Global Analytics dropped 5.5 percent compared with a 0.58 percent decline for the Barclay CTA Index. Other JWH funds have fallen more than 10 percent in 2009.

‘Check-Box Mentality’

“Institutions have a check-box mentality,” says President Kenneth Webster, who runs JWH from the third floor of a steel- and-glass complex in Boca Raton. JWH has found it easier to attract wealthy investors than to lure pension funds, he says. “Our volatility and drawdowns scare off institutions,” he says.

Henry says he’s not about to alter his trading programs. The Financial and Metals Portfolio delivered a 22 percent annual return over 25 years. Markets are always changing, and long-term trends will emerge, he says. If he bets on a position and the market moves against him, he bails, taking a small loss. When he’s right, he holds on for gains.

“We buy high and sell low,” he says as he heads to his Fenway box. It’s not a slip of the tongue. “We’re right 38 percent to 40 percent of the time,” he explains. “The key is how much money is allocated to the winning trades.”

Henry blames losses on the lack of sustained trends and on markets where prices change direction frequently.

“The key is not losing money when you’re waiting for trends to develop,” says Ken Steben, president of Rockville, Maryland-based money management firm Steben & Co., which allocates $1 billion to CTA funds. “Investors don’t like 40 percent drawdowns.”

Focus on Research

Aspect, Winton and other CTA firms have armies of mathematicians, physicists and engineers who devise tools to detect trends, says Andrew Lo, director of the Laboratory for Financial Engineering at MIT.

“Traditional CTAs, with a small research staff, will have a more difficult time competing,” he says.

Henry’s firm relies on six traders in Boca Raton, a community of 86,000 residents 50 miles (80 kilometers) north of Miami. His $6 million, 30,000-square-foot (2,787-square-meter) home there has a recording studio. He berths his 164-foot (50- meter) yacht, Iroquois, at nearby Rowes Wharf.

Last year, he paid $16 million for the 18,000-square-foot former estate of Los Angeles Dodgers owner Frank McCourt in Brookline, Massachusetts. He then applied for planning permission to knock it down to make way for a home of his liking. The old house is now gone.

Quiet Trading

On this sunny late-March day in Florida, two JWH traders in white shirts sit at computers in a glass-enclosed room. Flat- screen TVs on one wall broadcast business news; a 5-foot-wide photograph of frenzied traders at the Chicago Mercantile Ex- change adorns another.

Henry doesn’t spend much time at the office. In 2007, he named Webster, 44, president and chief operating officer of JWH. A graduate of Pace University in New York, Webster has been with the firm for 15 years.

On most days, the room is quiet as computers scan markets. A central system alerts traders to when they should place a trade for, say, oil futures contracts at a particular price. Another proprietary system, dubbed “mini-me,” checks trades against the program. Henry, who rarely goes to bed before 2 a.m., reviews Asian markets and sends e-mails to his investment team in the early morning hours.

“That’s when he gets a lot of his ideas,” Webster says.

Farmer’s Son

Multimillion-dollar trades, dual mansions and a private yacht are a long way from Arkansas, where Henry moved as an infant from Quincy, Illinois. Yet baseball, statistics and an obsession with winning have remained constants.

At home in Forrest City, Arkansas, 95 miles northeast of Little Rock, Henry listened to radio broadcasts of St. Louis Cardinals games. He cheered for outfielder Stan Musial, who’d go on to rack up 475 home runs in 22 seasons. Henry himself waves off his own Little League efforts.

“I was not very good,” he says.

Instead, he started keeping scores and calculating batting averages and pitchers’ earned run averages in his head. The family moved to Apple Valley, California, about 80 miles outside of Los Angeles, in the mid 1960s, when Henry was a teenager. He attended the University of California at both Irvine and Los Angeles. He never got a degree, instead taking philosophy courses, playing guitar and touring with a rock band called Elysian Fields.

“The Beatles were a big hit when I was 13,” he says. “Every boy in America wanted screaming women.”

At UCLA, he and a college instructor published a strategy on how to beat the odds at blackjack. Henry says he was ejected from tables at Las Vegas casinos at age 22.

Card Counter

“I was counting cards,” he says, grinning. Counters determine the probability of certain cards, such as tens or aces, being dealt. Although the approach isn’t illegal, casinos ban card counters. “I can count multiple decks,” Henry says. “It’s not hard.”

After Henry’s father died when John was 25, Henry looked for a strategy to protect the family soybean business. He entered the commodities markets, hedging to prevent losses if prices fell before the harvest. He read everything he could on commodities trading.

His favorite authors were William Delbert Gann on technical analysis; Bernard Baruch, who made a fortune in sugar and wrote an autobiography called “Baruch: My Own Story;” and Jesse Livermore, who shorted the stock market in 1929 and made $100 million, according to “Jesse Livermore: World’s Greatest Stock Trader” (Wiley, 2001) by Richard Smitten.

‘Seat of the Pants’

Henry’s early trades in corn, soybeans and wheat were very successful, he says.

“It was seat-of-the-pants investing,” he says. “Bull markets generally make you think you know markets a little better than you actually do.”

In the summer of 1980, Henry was in Norway with his first wife, Mai, a native of the Scandinavian country. Unable to speak the language, he occupied his time developing a trading strategy. He perused decades of prices and, using a calculator, pad and pen, drew charts to get a sense of how markets operated.

“I spent weeks that summer trying to devise a set of rules that would work consistently in all types of markets,“ Henry says. “I gained a sense of the ineffable mystery of markets and the fallacy of thinking that the time period just ahead will look somewhat like a preceding time period.”

Henry came up with betting on long-term trends. He used technical analysis tools such as moving-average price, a statistical method that smooths out fluctuations, to determine when to get into a position and when to exit. When the market goes against him, he sells with a small loss. When several markets turn against him, he can suffer big declines.

Hardworking and Ambitious

After nine months of testing, Henry set up a trading office in Irvine, California, in 1981. He invested family money from the farm in soybeans, corn and other agricultural commodities. Later, he brought on outside investors and expanded into currencies, interest rates and stock indexes.

Former commodities trader Jack Forest recalls Henry pulling up in a Ferrari to see him.

“He was definitely the most ambitious and hardworking of the bunch,” says Forest, who’s now a partner at Sunrise Capital Partners LLC, a Solana Beach, California-based managed futures firm that oversees $1 billion. “We were more laid back.”

Henry started his Financial and Metals Portfolio in 1984. Two years later, it gained 61 percent; in 1987, when the Dow Jones Industrial Average tumbled 23 percent in one day, the fund soared 252 percent. Henry made so much money that he considered retiring at age 38.

Going to Boca

Instead, he left day-to-day management in 1989 and moved his offices to Westport, Connecticut, to be closer to New York, which is about 50 miles south. In 1991, he set up trading in Boca Raton.

By the mid-1990s, Henry was managing $1.5 billion and charging 4 percent of assets as a management fee and 15 percent of profits for performance. Today, he charges a 2 percent fee and takes 20 percent of profits, which is more in line with the hedge fund industry.

At the end of the decade, he’d racked up seven winning years -- including an 84 percent gain in 1990, when oil prices took off after Iraq invaded Kuwait that August. From July 1 to Oct. 9 of that year, oil futures soared 142 percent on fear of supply disruptions.

‘A Lot of Money’

“His style worked for him,” says Gene Donney, founding partner at managed futures firm Dostan LLC in Boca Raton. “He’s made a lot of money and for years was charging investors the sort of fees you don’t see anymore.”

With his finances secure, Henry pursued his childhood passion for baseball. In 1989, he’d bought the West Palm Beach Tropics of the Florida-based Senior Professional Baseball Association. The roster included retired sluggers like Dave Kingman, who’d hit 442 homers for such teams as the New York Mets and San Francisco Giants. The league lasted a season and a half.

Next, he acquired a 50 percent stake in the minor league Tucson Toros in Arizona. In 1991, Henry took a 1 percent stake in the Yankees for an undisclosed amount. He sold after acquiring the Red Sox in 2002.

“In 1980, Henry told me, ‘I’m going buy the St. Louis Cardinals,’” says Mark Rosenberg, chairman of Stamford, Connecticut-based hedge fund firm SSARIS Advisors LLC. “I told him, ‘You don’t have any money,’ but he always believed he would.”

‘Going Home’

Instead of the Cardinals, Henry acquired the Florida Marlins for $158 million from Wayne Huizenga, who owned the Miami Dolphins and co-founded Blockbuster Inc. and Waste Management Inc. Henry failed to get politicians to back taxes to help fund a new ballpark in Miami.

He put the Marlins up for sale in 2001 and went after the Anaheim Angels, now called the Los Angeles Angels of Anaheim. “It would have been like going home,” Henry says of his California roots.

Henry gave up negotiating with Angels owner Walt Disney Co. in November 2001. He joined Larry Lucchino, 63, former CEO of the Baltimore Orioles and the San Diego Padres and television producer Tom Werner, 59, in pursuing the Red Sox.

Thomas Yawkey had bought the team from Robert Quinn in 1933 for $1.2 million. In 2000, the Yawkey Trust, which had controlled the Sox since the deaths of Yawkey in 1976 and his widow, Jean, in 1992, was selling. There were six bids, including one by Charles Dolan, chairman of Cablevision Systems Corp., which owns the New York Knicks basketball team.

Red Sox Acquisition

Henry, Lucchino and Werner made a $660 million offer in December 2001 and said they’d assume $40 million in debt. The group waited in a suite in the Boston Sheraton hotel for news from the officials of the Yawkey Trust, who met for almost nine hours.

“We had not heard anything and got dressed in jeans,” Henry says. “Then we saw on the TV that we’d won.”

Henry and his partners set about rejuvenating baseball’s second-most lucrative franchise, behind the Yankees, says Andrew Zimbalist, an economics professor at Smith College in Northampton, Massachusetts, who’s written about baseball finance.

“It was 180 degrees from previous management,” Zimbalist says, referring to former CEO John Harrington, who’d focused on a never-fulfilled desire to build a new ballpark.

Sprucing Up Fenway

Instead, Henry refurbished Fenway. He added 269 seats on top of the fabled Green Monster, the 37-foot left-field wall, and additional spots to accommodate more than 37,000 fans, up from 34,000 in 2001.

As of June 16, Boston had sold out 498 straight home games, a major league record. The Yankees are having trouble drawing big spenders to their new $1.5 billion stadium. On April 28, the team cut some premium seats to $1,250 from $2,500. At Fenway, the highest price is $325.

Henry brought in Bill James as a senior adviser to the team. Over the years, James had devised tools such as runs created and other formulas to analyze the game. Most baseball managers were skeptical of his methods, yet Henry, with his love of statistics, was a fan. CEO Lucchino promoted Theo Epstein, then 28, whom he’d hired as an assistant, to general manager in November 2002, making him the youngest GM in the history of major league baseball at the time.

Red Sox Comeback

In 2003, the second full year under Henry’s crew, the Red Sox reached the American League Championship Series for the first time since 1999, only to lose to the Yankees. The team appeared headed for the same fate in 2004. The Sox were three outs from elimination in the ALCS after losing three games to the Yankees.

No baseball team had ever come back from a 3-0 deficit in a best-of-seven series. Down 4-3 in the ninth inning, the Sox rallied to win 6-4 in extra innings. Boston added three more victories to beat the Yankees for the AL pennant and then swept Henry’s childhood favorite, the Cardinals, in four games to win the World Series.

The next year was less auspicious. The Chicago White Sox eliminated Boston three games to none in the first round of the playoffs. Epstein quit over disagreements with Lucchino.

Henry’s Doubt

“Maybe I’m not fit to be the principal owner of the Boston Red Sox,” Henry said at a Fenway press conference in November 2005.

Henry lured Epstein back in January 2006 with promises of more control and younger players. Henry has since become more involved in decision making. He paid $51.1 million to the Saitama Seibu Lions for the right to negotiate with Japanese pitcher Daisuke Matsuzaka, who signed a $52 million, six-year contract with Boston in 2006.

Henry was also involved in talks over Manny Ramirez, who left for the Dodgers in 2008. In May, Ramirez, who’s hit 533 career home runs, was suspended for 50 games for violating drug rules. Ramirez said in a statement the drug involved wasn’t a steroid. He didn’t appeal the suspension.

While Henry had a great 2004 with the Red Sox, life at his investment firm started to get less rosy. In 2005, 9 of Henry’s 11 funds posted losses of 10 percent or more. A bet on 30-year Treasury futures flopped. When rising December temperatures sent natural gas prices down 29 percent, that investment lost money too.

Merrill Lynch wanted Henry to alter his computer programs to reduce volatility, Webster recalls.

‘Markets Will Come Back’

“Merrill said other firms had made modifications to their systems and they couldn’t see that we had made those changes,” he says. “John Henry told them the markets have not changed and trends will emerge.” Merrill Lynch declined to comment.

Inside JWH, the investment policy committee engaged in long discussions on how to break out of the slump, says Jules Staniewicz, a former vice president and senior strategist at JWH.

“If you accept that markets will come back, then research is not so important and there is no need to change,” says Staniewicz, who left in 2007 after 15 years at the firm. That was Henry’s view -- and it prevailed. “The decision making was concentrated in Boston, and it was not a debate that was going to be won,” Staniewicz says, referring to Henry’s home during baseball season.

Henry and Chief Investment Officer Matthew Driscoll crunched data on price movements of commodities, currencies and interest rates to create another fund. Rivals were introducing short-to-medium-term strategies to capture trends lasting a few days rather than the 30 to 45 days at JWH.

Even Longer

Not Henry. The new JWH Diversified Plus had an even longer horizon: 45 to 60 days. It gained 24 percent in 2007 and 42 percent in 2008 with a bet on crude oil’s rise. The program was slow in determining the downward trend in July 2008. This year, it’s lost 5 percent through May.

During the Red Sox-Yankees battle in April, there are few positive signs as Henry watches from his box seat.

It’s 2-2 in the top of the seventh inning. Mark Teixeira, who snubbed Henry during the off-season to sign with New York, singles to center field, scoring Jeter. Robinson Cano’s sacrifice fly drives in another run. The Yankees take a 4-2 lead into the bottom of the ninth.

Rivera, New York’s star closer, gets the first out. Then Jason Bay, acquired from the Pittsburgh Pirates in the trade that sent Ramirez to the Dodgers, hits a two-run homer. The game goes into extra innings. Kevin Youkilis blasts the ball over the Green Monster in the 11th. Boston wins 5-4.

Henry is as charged up as the sellout Fenway crowd. One swing of the bat turned the game. If his computers can capture a market trend like they did last year with oil, Henry may have a shot at another year when both the Red Sox and his investors are winners.

To contact the reporter on this story: Kambiz Foroohar in New York at kforoohar@bloomberg.net

Last Updated: June 23, 2009 00:00 EDT