More turnover at Soros reflects shakeout. (Departures).Ever since George Soros George Soros Born in Budapest, Hungary, in 1930, George Soros is considered by many to be one of the world's greatest investors. A famous hedge fund manager, Soros managed the Quantum Fund, a fund that achieved an average annual return of 30% from 1970-2000. passed off the management of his hedge fund hedge fund, in finance, a highly speculative, largely unregulated investment device. Originating in the 1950s, the funds "hedge" by offsetting "short" positions (borrowing a security and then selling it at a higher price before repaying the lender) against "long" , it's become hard to keep track of who's at the helm. The 72-year-old financier has been churning chief executives with the gusto of a day trader Day Trader A stock trader who holds positions for a very short time (from minutes to hours) and makes numerous trades each day. Most trades are entered and closed out within the same day. Notes: This is a highly speculative practice. flipping shares. The latest casualty is William Stack, 56, who came to Soros after serving as chief investment officer for equities at Dresdner RCM RCM Reliability-Centered Maintenance RCM Royal College of Music RCM Royal Conservatory of Music RCM Royal Canadian Mint RCM Reliability Centered Maintenance RCM Revenue Cycle Management RCM Regional Climate Model RCM Ring-Closing Metathesis Global Investors in San Francisco. Stack ran Soros Fund Management The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. for only a year before Soros announced he would be replaced Jan. 1 by Mark Schwartz, 48, the former chairman of Goldman Sachs Asia. Schwartz is Soros' fourth CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. in two-and-a-half years, reflecting the tumult in the hedge fund universe, where old names like Michael Steinhardt and Julian Robertson have been superseded by young startups, and everybody is facing a shakeout. Hedge fund investment advisor George Van told Chief Executive he anticipates that flat returns next year will drive between 500 and 750 hedge funds out of the market by the end of 2003. Hedge funds rely entirely on profits to cover their costs and therefore have a hard time surviving even one year of flat returns, much less two. "Inexorably, the economics will prevail," Van predicts. The shakeout will impact large and small funds alike, but Europe's hedge fund market will likely bounce back faster, owing to its late entry into the fund startup stage, says Van. Steep losses in the stock market since spring 2000 have signaled the end of the heady '90s, when soaring returns triggered an explosion of new hedge funds. The wild market helped grow the industry from about 2,000 funds in 1990 to 7,500 worldwide, according to Van Hedge Fund Advisors International, an investor advisory firm in Nashville, Tenn. Assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. have ballooned in the same period from less than $100 billion to $600 billion. The tragedy of the shakeout to come is that some hedge funds will beat the S&P by 30 percent and still go out of business. The average American hedge fund lost 3.6 percent through September, but the S&P 500 lost 28.2 percent. "Nobody likes to see a loss," Van adds, "but give me a 3 percent loss over a 28 percent loss any day." |
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