Soros closes fund to outsiders

George Soros has closed his Quantum fund to outside investors, blaming the move on regulations that would compel him to register with the US Securities and Exchange Commission. Soros had largely retired from running clients’ money in 2000, but retained around $1bn. This will be returned to them by the end of the year and the fund will only manage the Soros family money from then on.

What the commentators said

“The move will be mourned by anyone whose money Mr Soros has managed,” said James Mackintosh in the FT. “He has turned $100,000 in 1973 into just over $100m.” At an average annual return of 20%, that makes him perhaps the most successful investment manager on record. The question may be why he didn’t stop years ago; with personal wealth of $14.5bn, he has no need of the fees. Like most hedgies, it must come down to a preference for trading over retirement, an intensely competitive nature – and perhaps loyalty to long-standing clients. But the “hassle of new regulations” has finally overcome any of those.

Soros is not alone in claiming this, added Christopher Swann on Breakingviews.com. “Stanley Druckenmiller and Carl Icahn made similar noises when handing back investors’ money.” But it may not be the whole story. These are tricky markets for large funds – Soros is down 6% this year. It would not be surprising if he could not be bothered explaining why to high-maintenance clients. Rather than admit that, “rules are a handy scapegoat”.


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