Soros Fund Management
You could call George Soros the Warren Buffett of hedge funds. Then again, you could easily describe Buffett as the Soros of mutual funds.
Between 1969 and 2000, Soros' flagship Quantum Fund reported a yearly return of 31 percent on average. Better than the 23 percent annual growth of Buffett's Berkshire Hathaway. Almost twice as good as the average hedge fund. Triple the return for the S&P 500. In 1993 he did so well that he received an estimated $1.1 billion in annual compensation.
Soros' investing style for most of Quantum's existence was characterized by large short-term bets on market directions. He was especially known for his currency speculation. In 1992, Quantum made $2 billion on a successful bet that the Bank of England would be forced to devalue the pound, a move widely considered to be a major factor in the downfall of Prime Minister John Major's goverment. In 1998 Malaysia's president accused Soros of precipitating that country's financial crisis.
His failures were as spectacular as his triumphs, particular in the later years. About $300 million vanished in the stock market crash of 1987, although Quantum still posted a 14 percent gain that year. Quantum reportedly declined in the last three years of the '90s, thanks to a string of defeats that include: a $2 billion loss from investing in post-Communist Russia; an estimated $700 million vaporized when Soros bet against Internet stocks a year too early; and a loss of up to $600 million from a incorrect wager on the Japanese yen in 1998.
By 2000, Soros had had enough. His two top portfolio managers left, and he merged his two funds to create a far more conservative vehicle, the Quantum Endowment Fund. "A move like Babe Ruth pledging that he would only try to hit singles from now on," is how online magazine Salon described the decision.
Soros has been an active philanthropist since 1979, and it consumes much of his time these days. He has poured almost $3 billion into a networkthat includes national foundations in 29 countries, foundations in Kosovo and Montenegro, and two regional foundations, the Open Society Initiative for Southern Africa and the Open Society Initiative for West Africa. All of the foundations share the common goal of transforming closed societies into open ones and protecting and expanding the values of existing open societies.
His interest in political freedom is understandable, given his background. Soros was born in Budapest, Hungary in 1930. He survived the Nazi occupation and left Communist Hungary in 1947 for England, where he graduated from the London School of Economics in 1952. While a student in London, Soros became familiar with the work of the philosopher Karl Popper, who became a strong influence on his thinking.
In 1956, Soros moved to the United States.
Soros has written seven books, most recently George Soros on Globalization. His articles and essays on politics, society, and economics regularly appear in major newspapers and magazines.