Tag Archives: George Soros

The 5 Highest-Earning Hedge Fund Managers And Traders

1. George Soros

1. George Soros

2013 Earnings: $4 billion
The legend continues. In 2013, George Soros had a pretty good year, with Soros Fund Management delivering returns north of 22%. That was not good enough to beat the U.S. stock market, but it still made Soros a lot of money. Soros is not involved in the day-to-day operations of Soros Fund Management, the $29 billion family office that manages Soros’ fortune and money he has given away to his foundations. The firm is overseen by Scott Bessent, Soros Fund Management’s chief investment officer, but Soros remains involved and the firm’s big short bet on the yen at the start of 2013 was vintage Soros. He continues to be a market moving force and his short of the yen after Japanese policy makers accelerated monetary easing was widely watched. The famous philanthropist was also involved in major hedge fund battleground stocks last year. Betting against fellow hedge fund billionaire Bill Ackman’s “pyramid scheme” hypothesis, Soros sided with Carl Icahn in going long the nutritional supplements company Herbalife, becoming one of the company’s largest shareholders. He trimmed the position near the end of the year. Born in Budapest, Soros survived the Nazi occupation of Hungary and went on to study at the London School of Economics before launching his hedge fund in 1969.

2. David Tepper

2. David Tepper

2013 Earnings: $3.5 billion
Tepper has set a new standard for hedge fund managers. His track record has long been phenomenal, but since the financial crisis his returns have reached a whole new level. In 2013, the 56-year-old founder of Appaloosa Management outperformed the U.S. stock market and the vast majority of hedge fund managers, with his biggest fund posting net returns of more than 42%. Over the last five years, Tepper’s main hedge fund has generated annualized net returns of nearly 40%—and gross returns of some 50%. In what has almost become an annual tradition, Tepper gave back some cash to his investors at the end of the year. In 2013, Tepper’s Appaloosa celebrated its 20th anniversary by pledging $20 million to various charities. Tepper also gave $67 million to Carnegie Mellon University last year—adding to the $55 million he previously gave the university—and continued to support other causes like basic needs and education.

3. Steve Cohen

3. Steve Cohen

2013 Earnings: $2.3 billion
In 2013, Cohen’s SAC Capital Advisors hedge fund firm pleaded guilty to criminal insider trading charges and agreed to pay $1.8 billion in fines and penalties to the federal government. Federal prosecutors in Manhattan worked on what turned out to be two more successful prosecutions of former SAC Capital employees and Cohen is transforming his Stamford, Ct., hedge fund firm into a family office, returning billions of dollars to outside investors. But through it all, Cohen, 58, continued to do what he does best—make profitable trades and earn lots of money. SAC Capital knocked out net returns of about 19% in 2013. That was not as good as what the U.S. stock market returned, but it beat most other hedge fund managers.

4. John Paulson

4. John Paulson

2013 Earnings: $1.9 billion
The biggest comeback ever? After three very tough years, Paulson, 58, came roaring back in 2013. His $2.7 billion Recovery Fund posted net returns of 63%, his Paulson Enhanced funds returned 33% and the Advantage funds generated net returns north of 26%. About 80% of the $20 billion in assets that Paulson’s Paulson & Co., hedge fund firm oversees are now above their high watermark, meaning the firm is charging rich performance fees again. The only trouble spot in 2013 was gold. The 28% plunge of the yellow metal in 2013 not only hurt the returns of his relatively small Gold Fund, in which he has a large stake, it also dented the returns of the gold-denominated holdings he personally keeps in his other hedge funds.

5. Carl Icahn

5. Carl Icahn

2013 Earnings: $1.7 billion
Carl Icahn was everywhere in 2013. He battled with Michael Dell, helped push Aubrey McClendon out of Chesapeake Energy, made a killer trade on Netflix, fought with William Ackman over Herbalife, and loudly lobbied for Apple to repurchase more of its stock. In the end, Icahn’s investment fund returned 31% in 2013, which is pretty impressive given that its portfolio was largely hedged.

Check out the other successful hedge fund managers, traders

 

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Icahn, Soros, Druckenmiller, And Now Zell: The Billionaires Are All Quietly Preparing For The Plunge

“The stock market is at an all-time, but economic activity is not at an all-time,” explains billionaire investor Sam Zell to CNBC this morning, adding that, “every company that’s missed has missed on the revenue side, which is a reflection that there’s a demand issue; and when you got a demand issue it’s hard to imagine the stock market at an all-time high.”

Zell said he is being very cautious adding to stocks and cutting some positions because

“I don’t remember any time in my career where there have been as many wildcards floating out there that have the potential to be very significant and alter people’s thinking.”

Zell also discussed his view on Obama’s Fed encouraging disparity and on tax inversions, but concludes, rather ominously, “this is the first time I ever remember where having cash isn’t such a terrible thing.” Zell’s calls should not be shocking following George Soros. Stan Druckenmiller, and Carl Icahn’s warnings that there is trouble ahead.

Billionaire 1: Sam Zell

On Stocks and reality…

“People have no place else to put their money, and the stock market is getting more than its share. It’s very likely that something has to give here.”

“I don’t remember any time in my career where there have been as many wildcards floating out there that have the potential to be very significant and alter people’s thinking,” he said. “If there’s a change in confidence or some international event that changes the dynamics, people could in effect take a different position with reference to the market.”

“It’s almost every company that’s missed has missed on the revenue side, which is a reflection that there’s a demand issue,” he said. “When you got a demand issue it’s hard to imagine the stock market at an all-time high.”

He also lamented about how difficult it is to call a market top. “If you’re wrong on when, that’s a problem.” His answer: “You got to tiptoe … and find the right balance.”

“This is the first time I ever remember where having cash isn’t such a terrible thing, despite the fact that interest rates are as low as they are,” he added.

Zell also said it’s unfortunate that “this inversion thing has been captured as a political, electioneering item.”

* * *

Billionaire 2: George Soros

Soros has once again increased his total SPY Put to a new record high of $2.2 billion, or nearly double the previous all time high, and a whopping 17% of his total AUM.

*  *  *

Billionaire 3: Carl Icahn

Ironically, Carl Icahn – poster-child of the leveraged financial engineering that has overtaken US equity markets on the back of Central Bank largesse – told CNBC that he was “very nervous” about US equity markets. Reflecting on Yellen’s apparent cluelessness of the consequences of her actions, and fearful of the build of derivative positions, Icahn says he’s “worried” because if Yellen does not understand the end-game then “there’s no argument – you have to worry about the excesssive printing of money!”

*  *  *

Billionaire 4: Stan Druckenmiller

Simply put, Druckenmiller concludes, rather ominously, “I am fearful that today our obsession with what will happen to markets and the economy in the near term is causing us to misjudge the accumulation of much greater long term risks to our economy.”

*  *  *

Soros sees risk of another world war

WASHINGTON (MarketWatch) — Billionaire investor George Soros said flatly that he’s concerned about the possibility of another world war

Much depends on the health of the Chinese economy, Soros said in remarks at a Bretton Woods conference at the World Bank.

If China’s efforts to transition to a domestic-demand led economy from an export engine falter, there is a “likelihood” that China’s rulers would foster an external conflict to keep the country together and hold on to power.

“If there is conflict between China and a military ally of the United States, like Japan, then it is not an exaggeration to say that we are on the threshold of a third world war,” Soros said.

Military spending is on the rise in Russia and China, he said.

To avoid this scenario, Soros called on the U.S. to make a “major concession” and allow China’s currency to join the International Monetary Fund’s basket of currencies. This would make the yuan a potential rival to the dollar as a global reserve currency.

In return, China would have to make similar major concessions to reform its economy, such as accepting the rule of law, Soros said.

Allowing China’s yuan to be a market currency would create “a binding connection” between the two systems.

An agreement along these lines will be difficult to achieve, Soros said, but the alternative is so unpleasant

“Without it, there is a real danger that China will align itself with Russia politically and militarily, and then the threat of third world war becomes real, so it is worth trying.”

Soros ‘stands ready’ to invest $1 billion in Ukraine

George Soros

VIENNA (Reuters) – Billionaire financier George Soros is ready to invest $1 billion in Ukraine, if Western countries help private investment there. He also put the odds of Greece leaving the euro at a third, in an interview with Austrian newspaper Der Standard.

Soros has previously urged the West to step up aid to Ukraine, outlining steps towards a $50 billion financing package that he said should be viewed as a bulwark against an increasingly aggressive Russia.

“The West can help Ukraine by increasing attractiveness for investors. A political risk insurance is necessary. This could take the form of mezzanine financing at EU interest rates — very close to zero,” he said in an interview published on Monday.

“I stand ready. There are concrete investment ideas, for example in agriculture and infrastructure projects. I would put in $1 billion. This must generate a profit. My foundation would benefit from this … Private engagement needs strong political leadership.”

The Hungarian-born hedge fund magnate, who made his name betting against the pound in 1992, also put the chance of Greece leaving the euro zone at a third. Last week he put it at 50:50.

Man Who Said No to Soros Builds BlueCrest Into Empire

When BlueCrest Capital Management LLP founder Michael Platt expanded into stocks this year to compete with Millennium Management LLC and SAC Capital Advisors LLP for traders, he tapped an unusual funding source: his banks.

He received a $750 million loan from 16 banks in July, enabling his hedge-fund firm, which oversees $34.2 billion, to hire at least 25 equity money managers and provide them with capital to start trading immediately, said two people with knowledge of the loan, who asked not to be identified because it isn’t public. Typically, hedge funds need to persuade clients to invest in new ventures and expand gradually, the people said.

HSBC Holdings Plc (HSBA), Citigroup Inc. (C),JPMorgan Chase & Co. (JPM) were among the banks eager to burnish their relationship with Europe’s third-biggest hedge-fund firm, which pays banks tens of millions of dollars a year in fees for trading and other services. The loan shows Platt’s clout as one of Wall Street’s most coveted clients and how aggressive he is to keep gathering assets and add new investing strategies, investors and executives at other funds said.

“I can’t think of any other examples like this,” said Daniel Celeghin, a partner at Casey Quirk & Associates LLC, a Darien, Connecticut-based firm that advises hedge funds on fundraising. “It’s just the nature of finance where if you are big and successful, people want to do business with you. If you are small and struggling, then it’s wait and see.”

Soros Rebuffed

Bankers and former colleagues describe Platt, 45, as a tough negotiator. He’s also loathe to cut deals that might cost him money, even when the person sitting on the other side of the table is hedge-fund royalty. After George Soros decided in 2011 to stop managing money for outside clients and turn his hedge-fund firm into a family office, the billionaire investor went to other money managers to ask whether they would oversee some of his $25.5 billion of assets.

Among those Soros spoke to was Platt, saying he would like him to take on more than $1 billion, while paying BlueCrest a 0.5 percent management fee and a 10 percent performance fee, according to a person with knowledge of their discussion. Platt thanked Soros, 83, for the meeting and declined the offer, saying plenty of investors were willing to pay BlueCrest 2-and-20, the industry standard of charging a 2 percent management fee and 20 percent of any profits, the person said.

Michael Vachon, a spokesman for Soros, and BlueCrest declined to comment on the meeting.

Save the New Ukraine By BERNARD-HENRI LÉVY and GEORGE SOROS

A NEW Ukraine was born a year ago in the pro-European protests that helped to drive President Viktor F. Yanukovych from power. And today, the spirit that inspired hundreds of thousands to gather in the Maidan, Kiev’s Independence Square, is stronger than ever, even as it is under direct military assault from Russian forces supporting separatists in eastern Ukraine.

The new Ukraine seeks to become the opposite of the old Ukraine, which was demoralized and riddled with corruption. The transformation has been a rare experiment in participatory democracy; a noble adventure of a people who have rallied to open their nation to modernity, democracy and Europe. And this is just the beginning.

This experiment is remarkable for finding expression not only in defending Ukraine’s territorial integrity from the separatists, but also in constructive work. Maidan’s supporters have moved from opposition to nation building.

Many of those in government and Parliament are volunteers who have given up well-paying jobs to serve their country. Natalie Jaresko, a former investment banker, now works for a few hundred dollars a month as the new finance minister. Volunteers are helping Ukraine’s one million internally displaced people as well as working as advisers to ministers and in local government.

The new Ukraine, however, faces a potent challenge from the old Ukraine. The old Ukraine is solidly entrenched in a state bureaucracy that has worked hand in hand with a business oligarchy. And the reformers are also up against the manifest hostility of Russia’s president, Vladimir V. Putin, who wants at all costs to destabilize Ukraine.

One drawback is that the new Ukraine is a well-kept secret, not just from the rest of the world but also from the Ukrainian public. Radical reforms have been hatched but not yet implemented.

It is instructive to compare Ukraine today with Georgia in 2004. When he became president that year, Mikheil Saakashvili immediately replaced the hated traffic police and removed the roadblocks used to extort bribes from drivers. The public recognized straight away that things had changed for the better.

Unfortunately, Ukraine has not yet found a similar demonstration project. Kiev’s police force is to be restructured, but if you need a driver’s license, you must still pay the same bribe as before.

Mr. Saakashvili was a revolutionary leader who first stamped out corruption but eventually turned it into a state monopoly. By contrast, Ukraine is a participatory democracy that does not rely on a single leader but on checks and balances. Democracies move slowly, but that may prove an advantage in the long run.

The big question is, will there be a long run? Although Russia is in a deepening financial crisis, Mr. Putin appears to have decided that he can destroy the new Ukraine before it can fully establish itself and before an economic downturn destroys his own popularity.

The Russian president is stepping up the military and financial pressure on Ukraine. Over the weekend, the city of Mariupol came under attack from forces that NATO said were backed by Russian troops, undermining the pretense that the separatists are acting on their own.

Ukraine will defend itself militarily, but it urgently needs financial assistance. The immediate need is for $15 billion. But to ensure Ukraine’s survival and encourage private investment, Western powers need to make a political commitment to provide additional sums, depending on the extent of the Russian assault and the success of Ukraine’s reforms.

The reformers, who want to avoid the leakages that were characteristic of the old Ukraine, have expressed their wish to be held accountable for all expenditures. They are passing extensive legislation but also want the International Monetary Fund to go on exercising oversight.

Unfortunately, just as democracies are slow to move, an association of democracies like the European Union is even slower. Mr. Putin is exploiting this.

It is not only the future of Ukraine that’s at stake, but that of the European Union itself. The loss of Ukraine would be an enormous blow; it would empower a Russian alternative to the European Union based on the rule of force rather than the rule of law. But if Europe delivered the financial assistance that Ukraine needs, Mr. Putin would eventually be forced to abandon his aggression. At the moment, he can argue that Russia’s economic troubles are caused by Western hostility, and the Russian public finds his argument convincing.

If, however, Europe is generous with its financial assistance, a stable and prosperous Ukraine will provide an example that makes clear that the blame for Russia’s financial troubles lies with Mr. Putin. The Russian public might then force him to emulate the new Ukraine. Europe’s reward would be a new Russia that has turned from a potent strategic threat into a potential strategic partner. Those are the stakes.

George Soros: Russia poses existential threat to Europe

Russians attend a rally in Moscow to support Vladimir Putin with the invasion of Crimea

Investor says Vladimir Putin’s aggressive nationalism challenges values and principles on which the EU was founded

George Soros has warned that Russia’s expansionism poses an existential threat to the EU and called for greater material support for Ukraine.

The investor and philanthropist argues that Vladimir Putin’s mix of authoritarianism and aggressive nationalism represents an alternative model to western liberal democracies, referring to the admiration for the Russian president expressed by the Ukip leader, Nigel Farage, the president of France’s Front National, Marine Le Pen, and Hungary’s prime minister, Viktor Orbán.

“Europe is facing a challenge from Russia to its very existence. Neither the European leaders nor their citizens are fully aware of this challenge or know how best to deal with it,” Soros writes in an article published in the New York Review of Books.

“Now Russia is presenting an alternative that poses a fundamental challenge to the values and principles on which the European Union was originally founded. It is based on the use of force that manifests itself in repression at home and aggression abroad, as opposed to the rule of law.”

Soros told the Guardian: “There is a general dissatisfaction with the EU as a result of the euro crisis, which has perverted the initial impetus for forming a union of like-minded democratic states. The euro crisis was mishandled and lasted a long time, and it turned a voluntary union of equals into something quite different.”

Soros said the EU had become a dysfunctional relationship between creditor and debtor nations, resulting in widespread resentment. “Putin has established good relations with those agitating against Europe,” he said. “The failure of Europe as an experiment in supranational government would make Russia a potent threat … The collapse of Ukraine would be a tremendous loss for Nato, the European Union and the United States. A victorious Russia would become much more influential within the EU and pose a potent threat to the Baltic states with large ethnic Russian populations.”

George Soros, says Putin has established good relations with those agitating against Europe.

George Soros, says Putin has established good relations with those agitating against Europe. Photograph: Stefan Zaklin/EPA

Soros, founder and chairman of the Open Society network of pro-democracy foundations, predicts that after the elections in Ukraine on Sunday, the Russian president will offer his Ukrainian counterpart, Petro Poroshenko, a gas supply deal on condition he appoint a prime minister acceptable to Putin.

If that is refused, Putin “may then revert to the smaller victory that would still be within his reach: he could open by force a land route from Russia to Crimea and Transnistria [a pro-Moscow breakaway statelet in Moldova] before winter”.

Soros calls for radically boosted western support of Ukraine with an “immediate cash injection of at least $20bn with a promise of more when needed” to help write off public debt, and help to reform the country’s energy sector to make it less dependent on Russia.

By assisting Ukrainian reformers, he argues that the EU would be rediscovering its founding principles. “The European Union would save itself by saving Ukraine,” Soros said.

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