The most shocking part of George Soros’ announcement that he is returning all outside money is how little of it there is.
According to reports, only about $750 million of the assets in the Quantum Endowment Fund belongs to outside investors. The remaining $24.5 billion or so is Soros family money.
- Where did Soros rank on this year’s Hedge Fund 100?
- What about last year’s?
- And what about the AR Rich List?
- Who is the best hedge fund manager by returns generated for investors?
- And check out our slideshow of the best of the best in hedge fund managers.
This is very upsetting to me, because each year I calculate the 25 highest-earning hedge fund managers. This ranking includes my estimate of the gains generated by the individual’s own capital in the fund and his or her share of the fees. According to my model, Soros made about $450 million last year, $3.3 billion in 2009, $1.1 billion in 2008 and $2.9 billion in 2007. The four-year total worked out to a little less than $8 billion. Not too shabby, even by hedge fund standards. Of course, during that same added “same’four-year period, John Paulson made nearly $13 billion.
In any case, the reason I was shocked by how little of the money in the fund did not belong to Soros or his family is that, I now realize, I heavily lowballed Soros’ gains. As it turns out, my model estimated Soros as having a lot less of his own money in the fund than turned out to be the case. Confidentiality of sources prevents me from discussing further why my reckoning was so low, but I have decided to recalculate my estimates. The result: I lowballed Soros by at least $5 billion.
As it turns out, he made somewhere between $13 billion and $14 billion over the past four years, including $850 million in 2010 when his fund was only up 2.63 percent in 2010.
In 2009 he made closer to $7 billion in 2009 , when the fund was up 29 percent, and should have been on the cover of AR magazine as the year’s highest earner, easily eclipsing David Tepper, who made roughly $4 billion that year from racking up triple-digit gains on bank stocks most investors didn’t have the nerve to touch.
I now figure Soros made closer to $1.6 billion in 2008 and more than $4 billion in 2007.
Since I began calculating the highest earners on Wall Street during the mid-1980s, I have always tried to be conservative. That way, if I’m wrong, I’m wrong on the low side, not the high side.
Unfortunately, I was way off with Soros.
My apologies, especially to Soros himself.
