Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Soros Taps Banker to Revive Fund




NEW YORK -- Hoping to turn around a dismal performance at his $13 billion hedge fund family, George Soros has picked Duncan Hennes, the former treasurer of Bankers Trust Corp., to serve as chief executive, with a mandate to end the personnel turmoil and other problems that have led to huge investor redemptions over the last year.


After a long search and interviews with several Wall Street executives, Soros picked Hennes, 42, to be in charge of hiring, compensation and other administrative chores and to oversee the arbitrage operation after the departure three months ago of the arbitrage specialists.


The addition of Hennes will free Soros Fund Management's top stock picker and chief investment strategist, Stanley Druckenmiller, who manages the flagship $6.7 billion Quantum Fund, to spend more time on investments.


Soros officials said Druckenmiller had asked Soros at the beginning of the year to hire someone to take over administrative duties because those jobs had become too great a burden. Though he is recognized as one of the world's leading investors, Soros has not played an active role in day-to-day investing decisions at the funds in a decade, focusing his time instead on philanthropic and other activities.


From 1992 through the end of last year, the Quantum fund returned more than 400 percent. But so far this year, the fund is down 11.2 percent, buffeted by a decision to sell Internet stocks short - in hopes they would decline - and by a bullish position on the single European currency. Instead of playing out the way portfolio managers had expected, the Internet shares continued to rise while the euro weakened. The two developments cost the fund more than 15 percent of its assets.


The fund has also been hurt because of its huge position in Waste Management Inc., which has suffered through an accounting scandal that has sent shares down more than 50 percent. But some other top stock holdings, including stakes in Enron Corp. and Globalstar Telecommunications Ltd., have performed well recently.


Personnel problems have also plagued the Soros funds lately. In May, three top analysts who headed the firm's "special situations" investments, including merger arbitrage, departed to form a new money-management firm, Satellite Asset Management.


And more recently, a half-dozen other Soros analysts have either been dismissed or quit, departures that a person close to the fund said were performance-related.


In an interview, Hennes said that Soros had given him a twofold mandate: "To get the operation in order in terms of administration, and the second challenge is to expand the franchise, and that's the one which is obviously less defined."