Profiting from Hedge Funds: Winning Strategies for the Little Guy

Chapter 11

George Soros

There has to be both some form of credit or leverage and some kind of misconception or misinterpretation involved for a boom-bust process to develop.

—George Soros

George Soros is founder and chairman of Soros Fund Management LLC, a hedge fund management firm founded in 1969. Born in Budapest in 1930, he and his family, using false identities, survived the Nazi occupation that started in 1944. Soros describes the experience as “exhilarating,” for they not only endured but helped many others.1 Soros immigrated to England in 1947, and graduated from the London School of Economics in 1952. His career started in earnest after a move to New York City in 1956, as an arbitrage trader at F. M. Mayer. Steadily climbing the corporate ladder, he became manager of the Double Eagle hedge fund in 1967, while working for First Eagle Funds. Soon after, he started his own hedge fund management firm, Soros Fund Management.

Soros Fund Management’s flagship product, Quantum Fund, returned over 30 percent per year in its first two decades. By the late 1980s Soros ranked near the top of the world’s wealthiest list and gave up day-to-day management of the firm. The aggressive strategies of the fund continued through the 1990s, until his partner Stanley Druckenmiller quit as portfolio manager in 2000. In 2001, the hedge fund was renamed Quantum Endowment Fund and converted to a less aggressive investment vehicle. In 2011, the fund converted to a family office structure to avoid ...