Soros Fund Management

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Soros Fund Management LLC is a privately held American investment management firm currently structured as a family office but formerly a hedge fund. The firm was founded in 1969 by George Soros and in 2010 was reported to be one of the most profitable firms in the hedge fund industry,[1] averaging a 20% annual rate of return over four decades.[2] It is headquartered at 888 7th Avenue in New York City

George Soros founded Soros Fund Management in 1969.

Overview[edit]

Soros Fund Management is the primary adviser for the Quantum Group of Funds; a family of funds dealing in international investments.[3] The company invests in public equity and fixed income markets worldwide, as well as foreign exchange, currency, and commodity markets, and private equity and venture capital funds.[4] The company is reported to have large investments in transportation, energy, retail, financial, and other industries.[5]

The Soros's family is well-represented in the company's leadership; the founder's son Robert Soros is Deputy Chairman and President.[6]

History[edit]

The company was founded by its chairman George Soros in 1969.[7]

1992 to 2007[edit]

In the week leading up to September 16, 1992 or "Black Wednesday", Quantum Funds earned $1.8 billion by shorting British pounds and buying German marks.[8] This transaction earned Soros the title of "the Man Who Broke the Bank of England". On the other hand, British government policy in the period before the ejection of the pound sterling from the Exchange Rate Mechanism of the European Monetary System had been widely criticised for providing speculators with a one-way bet.[9]

In 2000, the Quantum Fund lost its position as the largest hedge fund in the world when its assets under management changed $10 billion to $4 billion in about a year's time.[10] The fund's loses were a result of investments in technology stocks.[10] That year, CEO Duncan Hennes, and the managers of the Quantum Fund, Stanley Druckenmiller, and Quota Fund, Nicholas Roditi, resigned.[10] The restructuring of Soros Fund Management was announced in a shareholder letter that outlined its plan to merge the Quantum Fund with the Quantum Emerging Growth Fund to form the Quantum Endowment Fund.[10][11] The intention was to transform the Quantum Fund into a "lower-risk, less-speculative fund" administrated by an outside adviser.[10][12]

2008-2011[edit]

The firm acquired a stake in Lehman Brothers just prior to its failure in 2008.[5]

In 2009, Soros Fund Management partnered with six other hedge funds to acquire IndyMac Bank at a cost of $13.9 billion, thereby gaining control of an estimated $160 billion in bank loans, investments and deposits.[13]

In 2010, the company was reported to have created $32 billion in profits since 1973, making it one of the top profit making hedge funds in the industry.[1]

In 2011, the firm was reported to have $27.9 billion in assets under management and was ranked sixth on Institutional Investor's Hedge Fund 100 list.[14] That same year, the company partnered with Silver Lake Partners and created fund called Silver Lake Kraftwerk whose focus was investing in natural resource and energy companies.[15]

In July 2011, the fund announced plans to return just under $1 billion to investors by the end of 2011 to avoid reporting requirements under the Dodd-Frank reform act and to focus on family investments.[16] That month, the company's chief investment officer Keith Anderson, co-founder of BlackRock left the firm.[17]

References[edit]

  1. ^ a b Griffiths, Tony (October 6, 2010). "The HFMWeek 50 most influential people in hedge funds". HFMWeek. Retrieved 5 August 2011. 
  2. ^ Ahmed, Azam. "Soros to Close His Fund to Outsiders". DealBook. New York Times. Retrieved 26 September 2011. 
  3. ^ Michael T. Kaufman (11 March 2003). Soros: The Life and Times of a Messianic Billionaire. Random House Digital, Inc. pp. 193–. ISBN 978-0-375-70549-6. Retrieved 7 August 2011. 
  4. ^ "Investing BusinessWeek". Retrieved June 13, 2011. 
  5. ^ a b "Hoovers". Retrieved June 13, 2011. 
  6. ^ "Robert Soros Elected to CEU Board of Trustees". Central European University News + Information. CEU News and Information. Retrieved 7 October 2014. 
  7. ^ Robert Slater (2009). Soros: the world's most influential investor. McGraw-Hill Professional. pp. 164–. ISBN 978-0-07-160844-2. Retrieved 7 August 2011. 
  8. ^ Burton, Katherine (July 31, 2008). "Soros Successors Thiel, Howard Prove Global Bears Rule Markets". Bloomberg L.P. Retrieved 27 July 2011. 
  9. ^ Opalesque, quantumfundsonline.com (17 August 2009). "Soros Fund Management holdings $4.2 billion at June 30, 2009". 
  10. ^ a b c d e Welsh, James (July 1, 2000). "Street Talk - Soros Hedge Fund Managers Depart". On Wall Street. 
  11. ^ Lois Peltz (5 April 2001). The new investment superstars: 13 great investors and their strategies for superior returns. John Wiley and Sons. pp. 19–. ISBN 978-0-471-40313-5. Retrieved 7 August 2011. 
  12. ^ Soros' Quantum Fund Replaces Top Strategist - After Big Tech Losses, Fund Will Take A Lower-Risk Approach, "Investor's Business Daily", May 1, 2000.
  13. ^ Stephen Todd Walker (7 January 2011). Wave Theory For Alternative Investments: Riding The Wave with Hedge Funds, Commodities, and Venture Capital. McGraw-Hill Professional. pp. 366–. ISBN 978-0-07-174286-3. Retrieved 2 August 2011. 
  14. ^ "The 2011 Hedge Fund 100 Ranking". Institutional Investor, Inc. May 12, 2011. 
  15. ^ [1] NY Times.com Peter Lattiman, Feb 24 2011, retrieved May 11, 2011
  16. ^ Holmes, Robert (2011-07-26). "Soros Returns Capital, Avoids Dodd Frank". TheStreet, Inc. 
  17. ^ Zuckerman, Gregory (July 26, 2011). "Soros Investment Chief’s Departure Comes Amid Poor Performance". Wall Street Journal. Retrieved 8 August 2011.