Soros Fund Management
Encyclopedia
Soros Fund Management LLC is an American, privately held, hedge fund
management firm founded in 1969 by George Soros
. In 2010 it was reported to be one of the most profitable firms in the hedge fund industry, averaging a 20% annual rate of return over four decades.
, Ford Motor Company
, Global Ship Lease, Bluefly
, and Lattice Semiconductor
.
The chief operations officer for the fund is Abbas F. Zuaiter whose brother Ahmad F. Zuaiter is also a company executive.The Soros' family is well-represented in the company's leadership; the founder's sons, Jonathan Soros and Robert Soros are co-deputy chairmans, Jonathan Soros is president and Robert Soros is a managing partner.
", Quantum Funds earned $1.8 billion by shorting British pounds and buying German mark
s. 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
.
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. The fund's loses were a result of investments in technology stocks. That year, CEO Duncan Hennes, and the managers of the Quantum Fund, Stanley Druckenmiller
, and Quota Fund, Nicholas Roditi, resigned. 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. The intention was to transform the Quantum Fund into a "lower-risk, less-speculative fund" administrated by an outside adviser.
just prior to its failure in 2008.
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.
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.
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. That same year, the company partnered with Silver Lake Partners
to create a new fund called Silver Lake Kraftwerk whose focus was investments in the energy and natural resource sectors.
In July 2011 the fund announced plans to return of 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. That month, the company's chief investment officer Keith Anderson, co-founder of BlackRock
left the firm.
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
management firm founded in 1969 by George Soros
George Soros
George Soros is a Hungarian-American business magnate, investor, philosopher, and philanthropist. He is the chairman of Soros Fund Management. Soros supports progressive-liberal causes...
. In 2010 it was reported to be one of the most profitable firms in the hedge fund industry, averaging a 20% annual rate of return over four decades.
Overview
Soros Fund Management is the primary adviser for the Quantum Group of Funds; a series of funds dealing in international investments. 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. The company is reported to have large investments in transportation, energy, retail, financial and other industries and owns stock in the Hess CorporationHess Corporation
The Hess Corporation is an integrated oil company based in New York City. The company explores, produces, transports, and refines crude oil and natural gas. Vertically completing the logistical chain, about 1,360 Hess branded filling stations market gasoline to consumers in 16 states along the...
, Ford Motor Company
Ford Motor Company
Ford Motor Company is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK...
, Global Ship Lease, Bluefly
Bluefly
Bluefly, Inc. is an American electronic commerce company. Headquartered in New York, New York, it was one of the first online retailers to sell fashion in a sophisticated manner. Ken Seiff and a team of six founded Bluefly.com, Inc. in 1998 and built it in less than four months from the time it...
, and Lattice Semiconductor
Lattice Semiconductor
Lattice Semiconductor Corporation is a United States based manufacturer of high-performance programmable logic devices . Founded in 1983, the company employs about 700 people and has annual revenues of around $300 million, with Darin Billerbeck as the chief executive officer...
.
The chief operations officer for the fund is Abbas F. Zuaiter whose brother Ahmad F. Zuaiter is also a company executive.The Soros' family is well-represented in the company's leadership; the founder's sons, Jonathan Soros and Robert Soros are co-deputy chairmans, Jonathan Soros is president and Robert Soros is a managing partner.
1992 to 2007
In the week leading up to September 16, 1992 or "Black WednesdayBlack Wednesday
In politics and economics, Black Wednesday refers to the events of 16 September 1992 when the British Conservative government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism after they were unable to keep it above its agreed lower limit...
", Quantum Funds earned $1.8 billion by shorting British pounds and buying German mark
German mark
The Deutsche Mark |mark]], abbreviated "DM") was the official currency of West Germany and Germany until the adoption of the euro in 2002. It is commonly called the "Deutschmark" in English but not in German. Germans often say "Mark" or "D-Mark"...
s. This transaction earned Soros the title of "the Man Who Broke the Bank of England
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
". On the other hand, British government policy in the period before the ejection of the pound sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
from the Exchange Rate Mechanism of the European Monetary System
European Monetary System
There are three stages of monetary cooperation in the European Union.-Background:European currency exchange rate stability has been one of the most important objectives of European policy makers at least since the Second World War....
had been widely criticised for providing speculators with a one-way bet
Arbitrage betting
Betting arbitrage, miraclebets, surebets, sports arbitraging is a particular case of arbitrage arising on betting markets due to either bookmakers' different opinions on event outcomes or plain errors. By placing one bet per each outcome with different betting companies, the bettor can make a profit...
.
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. The fund's loses were a result of investments in technology stocks. That year, CEO Duncan Hennes, and the managers of the Quantum Fund, Stanley Druckenmiller
Stanley Druckenmiller
Stanley Freeman Druckenmiller is an American hedge fund manager, he is the former Chairman and President of Duquesne Capital, which he founded in 1981. He closed the fund in August 2010 because he felt unable to deliver high returns to his clients...
, and Quota Fund, Nicholas Roditi, resigned. 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. The intention was to transform the Quantum Fund into a "lower-risk, less-speculative fund" administrated by an outside adviser.
2008-2011
The firm acquired a stake in Lehman BrothersLehman Brothers
Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
just prior to its failure in 2008.
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.
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.
In 2011, the firm was reported to have $27.9 billion in assets under management and was ranked sixth on Institutional Investor
Institutional investor
Institutional investors are organizations which pool large sums of money and invest those sums in securities, real property and other investment assets...
's Hedge Fund 100 list. That same year, the company partnered with Silver Lake Partners
Silver Lake Partners
Silver Lake is a US-based private equity firm focused on leveraged buyout and growth capital investments in technology, technology-enabled and related industries...
to create a new fund called Silver Lake Kraftwerk whose focus was investments in the energy and natural resource sectors.
In July 2011 the fund announced plans to return of 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. That month, the company's chief investment officer Keith Anderson, co-founder of BlackRock
BlackRock
BlackRock, Inc. is an American multinational investment management corporation and the world's largest asset manager. BlackRock is headquartered in Manhattan, New York City, New York, United States and is the leading provider of investment, advisory, and risk management solutions...
left the firm.