Billionaire hedge fund manager George Soros will be returning $1 billion to investors due to the new Dodd-Frank Act requiring that hedge funds register with financial regulators. In order to avoid registering under the new regulations, from now on Soros will be solely dealing with family investments, which are exempted under the new rules. The majority of his fund, a total of roughly $24 billion, is in family investments.
Soros’ decision means he will no longer be handling funds for outside investors. He became known for generating annual returns of 20% on his investments, and in 1992 bet against the pound as the British exited the European Exchange Rate Mechanism, resulting in $1.1 billion payout. Soros is also known for his philanthropic work and support of liberal causes, giving away billions of dollars earned through his investments.
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Soros is not the only top fund manager returning money to outside investors, and has been preceded by the likes of Stanley Druckenmiller, Soros’ former deputy, Chris Shumway, and Carl Icahn. By limiting funds solely to family investments, it may be easier for hedge fund managers to take big bets that could reap big rewards, as they will no longer have to consult with outside partners. While some analysts worry that the regulations will result in fewer institutional investments, so far most fund managers who have returned money to outside investors have continued to invest actively.