Soros closing €18bn hedge fund to outside investors
Published 27/07/2011 | 05:00
Billionaire investor George Soros is closing his nearly $26bn (€18bn) hedge fund to outside investors so that it will be managed solely for the Soros family, according to a letter obtained yesterday.
The letter, sent to investors in the Quantum Endowment Fund, says Soros Fund Management LLC is making the change because of new rules that will expand hedge fund disclosure requirements.
About $750m of the total $25.5bn in the fund is invested for outsiders, rather than the family, according to a person familiar with the matter. The person declined to be identified because he was not authorised to disclose details about the private company.
The $750m is expected to be returned to outside investors by year's end.
Chief investment officer Keith Anderson is leaving as the fund closes to outsiders, according to the letter from Mr Soros's sons, Jonathan and Robert, who are deputy chairmen of the New York-based, family run company.
The fund has delivered average annual returns of about 20pc a year since its inception in 1969. Mr Soros, now 80, amassed a fortune betting on global currency markets, including his successful speculation in 1992 that the British government would devalue the pound.
The fund closed to investments from new outside clients in 2000, and the cash that will be returned is from long-time clients who invested before that change.
The fund's latest move comes as hedge funds face closer scrutiny from regulators. Hedge funds are lightly regulated investment pools. Investors in them are primarily wealthy individuals and institutional clients such as pension funds and endowments.
The financial overhaul law that the US Congress passed last year requires hedge funds to open their books to periodic inspections by the Securities and Exchange Commission. The funds also will be forced to disclose information about their operations, finances and investors.