Two months ago, we wrote that in the latest move by a prominent billionaire seeking an exit from the boredom of retirement and a return to active asset management, none other than George Soros had decided to return to trading at the fund he founded, the $25 billion Soros Fund Management family office with, what the WSJ described at the time, were "big, bearish bets."
While Soros had always closely monitored his firm’s investments, as he got older he would delegate more and more, with many of his proteges moving on to start their own hedge funds, Trump's fundraiser Steven Mnuchin being just one example. As a result, in recent years, he hadn't done as much investing of his own. That however changed in early 2016 when Soros was spending more time in the office directing trades.
Soros had stepped into a void at his firm.
Last year, Scott Bessent, who served as Soros’s top investor and has a background in macro investing left the firm to start his own hedge fund. Soros has invested $2 billion with Mr. Bessent’s firm, Key Square Group.
Later in 2015, Soros tapped Ted Burdick as his chief investment officer. As we noted at the time, Burdick had a background in distressed debt, arbitrage and other types of trading, rather than macro investing, Soros’s lifelong specialty. It is that lack of experience that may have caused frictions at the fund of the newly bearish billionaire.
As Bloomberg reported moments ago, Ted Burdick is stepping down as chief investment officer for George Soros’s $25 billion family office after just 8 months in the position.
Burdick will remain in current post until replacement is found; then will return to running a credit portfolio at the firm, according to people familiar cited by Bloomberg.
Soros Fund Management is looking for CIO candidate with experience in macroeconomic investing, said one of the people Michael Vachon, a spokesman for Soros, declined to comment.
It is unclear if the significant personnel change - typically CIOs are given a lengthy time runway in which to put on and test out their strategies - is indicative of a hit to the Soros P&L. According to sources, Soros' openly bearish bets to date have been a source of loss, however not a dramatic one, especially since Soros' negative bias is nowhere near that of his bearish peer, Carl Icahn, who as we reported recently is nearly 150% net short.
If the losses are confirmed, we look forward to Soros' reaction as he takes over even greater investing responsibilities at his fund: will he double down or simply close the positions.
As for a replacement, our suggestion is simple: just hire a central banker. After all, they are some of the very few traders left in this "market."