SAN FRANCISCO, Calif. (HedgeWorld.com)–J. Carlo Cannell announced that he would step down as the principal of the Cannell family of hedge funds by June 2004.

Speaking at the Third Annual Alternative Asset Summit, San Francisco, Mr. Cannell said that he intends to leave most of his family’s net worth under the management of Cannell Capital LLC, the company he founded in 1992.

His retirement, “in no way suggests a lack of confidence in the management or investment style of Cannell Capital. We will still be amongst the largest investors,” he said. He could not say whether he will be off the rat racetrack for just six months or forever.

The baton of leadership will pass to Kenneth D. Heller, who has been with Cannell Capital for seven years, and Annabelle M. Wong, 30, who has been there for five years. Neither Mr. Heller nor Ms Wong could be reached for comment.

Cannell Capital manages US$765 million and only weeks ago announced the return of 15% of the capital of all its funds to investors .

“When Cannell Capital was in diapers, I regretted neglecting my family,” Mr. Cannell said. “Now that my son is in diapers and the business is not, I have decided to take some time off to be with them.”