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Soros getting out of the game

Apparently, there was a reason that Soros was 75% in cash. He is getting out of the hedge fund business altogether, liquidating assets and returning the funds to investors.

Last Tuesday Bloomberg said that Soros’ $25 billion Quantum Endowment Fund told portfolio managers to pull back after choppy markets caused them to lose 6% in the year-to-date. The fund was reported to be 75% in cash and waiting for better opportunities.

Soros himself was quoted as saying, “I find the current situation much more baffling and much less predictable than I did at the time of the height of the financial crisis.” The article went on to explain how the markets were especially tricky and why some saw big moves developing.

But now, Bloomberg is reporting that Soros is exiting the hedge fund business altogether. The move was partly explained by new financial regulations which would have necessitated the firm’s registering with the SEC by March 2012 if it managed money for outsiders. This is part of an attempt to bring the shadow banking world under the supervisory umbrella of government in the aftermath of the Lehman Brothers bankruptcy in 2008.

However, I imagine this move is not just about an attempt to avoid regulation. Soros’ earlier comments point to turbulence ahead. Now is a perfect time to wind down the business after a stellar 40-year record.

Bloomberg has a lot more at the link below.

Source: Soros to End Hedge-Fund Career, Return Money

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.

3 Comments

  1. John Haskell says:

    Has Soros retired more, or fewer times than Sugar Ray Leonard, I forget

  2. Namazu says:

    According to Bloomberg and other sources, all but $1B is family money. Perhaps Soros sees DXY putting in a multi-decade bottom, then defying gravity like JPY before it. I think this would be consistent with your ideas on debt deflation.

    • David Lazarus says:

      Yes I think a multi year bottom is highly likely. Though it still has to get there. I think substantial falls in asset values are coming.