George Soros
George Soros is a Hungarian-American investor and philanthropist., he has a net worth of US$7.2 billion, having donated more than $32 billion to the Open Society Foundations, of which $15 billion has already been distributed, representing 64% of his original fortune. In 2020, Forbes called Soros the "most generous giver" in terms of percentage of net worth.
Born in Budapest to a non-observant Jewish family, Soros survived the Nazi occupation of Hungary and moved to the United Kingdom in 1947. He studied at the London School of Economics and was awarded a BSc in philosophy in 1951, and then a Master of Science degree, also in philosophy, in 1954. Soros started his career working in British and American merchant banks, before setting up his first hedge fund, Double Eagle, in 1969. Profits from this fund provided the seed money for Soros Fund Management, his second hedge fund, in 1970. Double Eagle was renamed Quantum Fund and was the principal firm Soros advised. At its founding, Quantum Fund had $12 million in assets under management, and as of 2011 it had $25 billion, the majority of Soros's overall net worth.
Soros is known as "The Man Who Broke the Bank of England" as a result of his short sale of worth of pounds sterling, which made him a profit of $1 billion, during the 1992 Black Wednesday UK currency crisis. Based on his early studies of philosophy, Soros formulated the general theory of reflexivity for capital markets, to provide insights into asset bubbles and fundamental/market value of securities, as well as value discrepancies used for shorting and swapping stocks.
Soros supports progressive and liberal political causes, to which he dispenses donations through the Open Society Foundations. Between 1979 and 2011, he donated more than $11 billion to various philanthropic causes; by 2017, his donations "on civil initiatives to reduce poverty and increase transparency, and on scholarships and universities around the world" totaled $12 billion. His influence and activities helped set off the fall of communism in Eastern Europe in the late 1980s and early 1990s, and provided one of Europe's largest higher education endowments to the Central European University in his Hungarian hometown. Soros's extensive funding of political causes has made him a "bugaboo of European nationalists". Numerous far-right theorists have promoted claims that characterize Soros as a dangerous "puppet master" behind alleged global plots. Criticisms of Soros, who is a Holocaust survivor, have often been called antisemitic conspiracy theories. In 2018, The New York Times reported that "conspiracy theories about him have gone mainstream, to nearly every corner of the Republican Party".
Early life and education
György Schwartz was born on 12 August 1930 in Budapest in the Kingdom of Hungary to a prosperous non-observant Jewish family. Soros has wryly described his home as antisemitic. The family of his mother Erzsébet operated a successful silk store. His father Tivadar was a lawyer and a well-known Esperanto author who edited the Esperanto literary magazine Literatura Mondo and raised his son to speak the language. Tivadar had also been a prisoner of war during and after World War I until he escaped from Russia and rejoined his family in Budapest.Soros's parents married in 1924. In 1936, Soros's family changed their name from the German-Jewish "Schwartz" to "Soros", as protective camouflage in increasingly antisemitic Hungary. Tivadar liked the new name because it is a palindrome and because of its meaning. In Hungarian, soros means "next"; in Esperanto it means "will soar".
Soros was 13 years old in March 1944 when Nazi Germany occupied Hungary. The Nazis barred Jewish children from attending school, and Soros and the other schoolchildren were made to report to the Judenrat, which had been established during the occupation. Soros later described this time to writer Michael Lewis:
The Jewish Council asked the little kids to hand out the deportation notices. I was told to go to the Jewish Council. And there I was given these small slips of paper... I took this piece of paper to my father. He instantly recognized it. This was a list of Hungarian Jewish lawyers. He said, "You deliver the slips of paper and tell the people that if they report they will be deported". I'm not sure to what extent he knew they were going to be gassed. I did what my father said.
Soros did not return to that job; his family survived the war by purchasing documents to say that they were Christians. Later that year at age 14, Soros posed as the Christian godson of an official of the collaborationist Hungarian government's Ministry of Agriculture, who himself had a Jewish wife in hiding. On one occasion, rather than leave the 14-year-old alone, the official took Soros with him while completing an inventory of a Jewish family's confiscated estate. Tivadar saved not only his immediate family, but also many other Hungarian Jews, and Soros later wrote that 1944 had been "the happiest of his life", for it had given him the opportunity to witness his father's heroism. In 1945, Soros survived the Siege of Budapest, in which Soviet and German forces fought house-to-house through the city. George and his mother also spent some time hiding with the family of Elza Brandeisz and even attended their Lutheran church with them. When he was 17, Soros relocated to Paris before eventually moving to England. There he became a student at the London School of Economics. While a student of the philosopher Karl Popper, Soros worked as a railway porter and as a waiter, and once received £40 from a Quaker charity. Soros would sometimes stand at Speakers' Corner lecturing about the virtues of internationalism in Esperanto, which he had learned from his father. Soros obtained his Bachelor of Science in philosophy in 1951 and a Master of Science in philosophy in 1954 from the London School of Economics. After graduating, he wanted to stay in the university and work as a professor, but his grades were not high enough, prompting him to work for an investment firm in London.
Financial career
Early business experience
In a discussion at the Los Angeles World Affairs Council in 2006, Alvin Shuster, former foreign editor of the Los Angeles Times, asked Soros, "How does one go from an immigrant to a financier?... When did you realize that you knew how to make money?". Soros replied, "Well, I had a variety of jobs and I ended up selling fancy goods on the seaside, souvenir shops, and I thought, that's really not what I was cut out to do. So, I wrote to every managing director in every merchant bank in London, got just one or two replies, and eventually that's how I got a job in a merchant bank."Singer and Friedlander
In 1954, Soros began his financial career at the merchant bank Singer & Friedlander of London. He worked as a clerk and later moved to the arbitrage department. A fellow employee, Robert Mayer, suggested he apply at his father's brokerage house, F.M. Mayer of New York.F. M. Mayer
In 1956, Soros moved to New York City, where he worked as an arbitrage trader for F. M. Mayer. He specialized in European stocks, which were becoming popular with U.S. institutional investors following the formation of the Coal and Steel Community, which later became the Common Market.Wertheim and Co.
In 1959, after three years at F. M. Mayer, Soros moved to Wertheim & Co. He planned to stay for five years, enough time to save $500,000, after which he intended to return to England to study philosophy. He worked as an analyst of European securities until 1963.During this period, Soros developed the theory of reflexivity to extend the ideas of his tutor at the London School of Economics, Karl Popper. Reflexivity posits that market values are often driven by the fallible ideas of participants, not only by the economic fundamentals of the situation. Ideas and events influence each other in reflexive feedback loops. Soros argued that this process leads to markets having procyclical "virtuous" or "vicious" cycles of boom and bust, in contrast to the equilibrium predictions of more standard neoclassical economics.
Arnhold and S. Bleichroeder
From 1963 to 1973, Soros's experience as a vice president at Arnhold and S. Bleichroeder resulted in little enthusiasm for the job; business was slack following the introduction of the Interest Equalization Tax, which undermined the viability of Soros's European trading. He spent the years from 1963 to 1966 with his main focus on the revision of his philosophy dissertation. In 1966, he started a fund with $100,000 of the firm's money to experiment with his trading strategies.In 1969, Soros set up the Double Eagle hedge fund with $4m of investors' capital including $250,000 of his own money. It was based in Curaçao, Dutch Antilles. Double Eagle itself was an offshoot of Arnhold and S. Bleichroeder's First Eagle fund established by Soros and that firm's chairman Henry H. Arnhold in 1967.
In 1973, the Double Eagle Fund had $12 million and formed the basis of the Soros Fund. George Soros and Jim Rogers received returns on their share of capital and 20 percent of the profits each year.
Soros Fund Management
In 1970, Soros founded Soros Fund Management and became its chairman. Among those who held senior positions there at various times were Jim Rogers, Stanley Druckenmiller, Mark Schwartz, Keith Anderson, and Soros's two sons.In 1973, due to perceived conflicts of interest limiting his ability to run the two funds, Soros resigned from the management of the Double Eagle Fund. He then established the Soros Fund and gave investors in the Double Eagle Fund the option of transferring to that or staying with Arnhold and S. Bleichroeder.
By the time it was renamed the Quantum Fund, the value of the fund had grown to $12m, only a small proportion of which was Soros's own money. He and Jim Rogers reinvested their returns from the fund, and also a large part of their 20% performance fees, thereby expanding their stake.
By 1981, the fund had grown to $400m, and then a 22% loss in that year and substantial redemptions by some of the investors reduced it to $200m.
In July 2011, Soros announced that he had returned funds from outside investors' money and instead invested funds from his $24.5 billion family fortune, due to changes in U.S. Securities and Exchange Commission disclosure rules, which he felt would compromise his duties of confidentiality to his investors. The fund had at that time averaged over 20% per year compound returns.
In 2013, the Quantum Fund made $5.5 billion, making it again the most successful hedge fund in history. Since its inception in 1973, the fund has generated $40 billion.
The fund announced in 2015 that it would inject $300 million to help finance the expansion of Fen Hotels, an Argentine hotel company. The funds will develop 5,000 rooms over the next three years throughout various Latin American countries.