Soros ends career: Investment group to hand $1bn back to clients

27th July 2011

Soros, who turns 81 next month, became world famous after making millions betting that the UK would be forced to devalue the pound during the 1992 Black Wednesday currency crisis, says the report.

He was also known as a philanthropist and social activist, and for ending the "war on drugs". He now intends to manage his own money but will no longer run investment funds.

Citing new rules that would have required it to submit to more federal oversight, Soros's management firm said on Tuesday that it plans to close its $25.5 billion funds to outside investors and become a family-only enterprise, reports The Washington Post.

The report adds that the move raised eyebrows in financial circles because Soros was an outspoken advocate for reforming Wall Street in the wake of the financial crisis.

Under the new rules, hedge funds with more than $150m (£90m) in assets must report information about their investors and the assets they manage, including potential conflicts of interest.

Peter Moore, head of regulation & compliance, The IMS Group, says that he does not expect other hedge fund managers to follow suit: "Few other hedge fund managers are likely to follow suit given the unique characteristics (that the vast majority of the funds under management is family money) of this firm. In contrast, Warren Buffet's Berkshire Hathaway's investment vehicle manages the funds of his investor shareholders. Also, the timing of the change at Soros appears to coincide with other changes within the firm, such as the retirement of the Chief Investment Officer. The firm will continue managing a large amount of money (reported at around $24.5bn) and will remain one of the largest and influential investors in the world."

Mr Soros' sons, Jonathan and Robert Soros, who are co-deputy chairmen of Soros Fund Management (SFM), have written a letter to investors to inform them the hedge fund will convert to a family office by the year-end, adds the Daily Telegraph.

The Soros funds have been good long-term performers, returning about 20% a year on average since 1969. Recently the Quantum fund has underperformed, reportedly losing 6% in the first half of the year.

To receive our free email newsletter sign up here.

Leave a Reply

Your email address will not be published. Required fields are marked *