Hedge fund manager Chris Shumway told investors on Friday that he is returning all of their money in a few weeks, becoming the latest prominent stock picker to essentially shut down his firm.

The 45-year-old manager, who got his start working for hedge fund industry legend Julian Robertson's Tiger Management, told investors in Shumway Capital Partners that he will continue to oversee his own money.

Noting that his decision was very difficult, Shumway wrote to clients that after nine great years, I have decided to return all external capital back to you, our partners, by the end of the first quarter of 2011. A copy of the letter was obtained by Reuters.

The move was first reported by Bloomberg.

Shumway now joins a growing list of middle-aged managers who surprised their investors by suddenly returning capital. Last year Stanley Druckenmiller, best known for engineering Soros Fund Management's famous bet against the British pound, quit. Before him, well-known technology investor Dan Benton shut down his firm.

Only a few months ago Shumway said he was stepping down as chief investment officer from the $8 billion fund firm, appointing Tom Wilcox to run the day-to-day operations. Wilcox, he wrote to clients in November, was the single most profitable individual in our firm's history and has been critical to our success.

The move unnerved investors and clients asked for billions of dollars back. More recently, though, some said they were reassured that Shumway said he was reinvigorated by focusing on big issues.

Since 2002, the firm has returned an average 17 percent a year, 14 percent above those for the S&P 500 through multiple market cycles, Shumway told investors.

Only a year ago Goldman Sachs' Petershill Fund, which buys equity stakes in hedge funds, took a stake in Shumway.

Shumway has long been celebrated as a talented stock picker, but his performance suffered some last year, people familiar with his returns said.

(Reporting by Svea Herbst-Bayliss, editing by Gerald E. McCormick, Dave Zimmerman)